teleco.com.br

05/06/2010

GVT

This page : GVT results, fixed telephony operator and internet in Brazil.

Operations begin in em São Paulo

GVT announced the beginning of the operations in São Paulo, starting by the cities of Sorocaba and Jundiaí, because these cities are inside strategic locations in the state, with intense economic activity. Both cities are in the first step of GVT's expansion schedule in São Paulo. GVT is likely to break into the São Paulo (capital) until 2011.

The company will offer fixed telephony and broadband with 100 Mbps speed.

The investments reached R$ 40.1 million in the construction of network with capacity to 38 thousand broadband and voice accesses, corresponding to 30% of the coverage in both cities.

www.gvt.com.br

Operational Performance

Thousands	2006	2007	2008	2009
Acesses in service	635	752	1,038	1,442
ADSL*	137	246	442	669
VOIP subscribers*	35	74	100	158
Employees	2670	-	-	-

* included in accesses in service

In 2009, GVT covered 84 cities, 75 inside the Region II and 9 in other regions.

Consult: VoIP in GVT

Financial Economic Performance

R$ Millions	2006	2007	2008	2009
Gross Revenue	1,200	1,535	2,129	2,771
Net Revenue	769	981	1,320	1,699
EBITDA	255.6	358.1	502.7	655.6
EBITDA Margin	33.3%	36.5%	38.1%	38.6%
Net (loss) Profit	(72)	59	18	(11)
Net Debt	(1,142)	110	(285)	(153)
Investments	190	566	721	658

Net Revenue

R$ Millions	2006	2007	2008	2009
Fixed Telephony	588	716	893	1,106
Local Service	423	516	650	806
Long distance	121	148	185	214
Network Use	44	53	58	86
Data per companies	34	46	93	156
Internet	132	191	276	392
Broad Band	62	128	220	345
ISP	70	63	56	47
VoIP	14	26	33	39
Net Revenue	768	981	1,320	1,699

Vivendi purchases GVT

Vivendi announced in 11/13/09 the acquisition of GVT's stocks from its controllers for R$ 56.00 per stock, what represents 37.9% of the total. Vivendo also had the option of purchasing further stocks (19.6%), reaching the total of 57.5% of the shares.

These options were options were bought in 12/23/09 as well as other groups of stocks. So Vivendi became the owner of 85.5% of GVT's capital.

Vivendi's target is to acquire all GVT's stocks, which would no longer have its shares negotiated in the Brazilian stock exchange.

Public Offer to acquire all GVT's capital

Vivendi launched on 03/26/2010, a public offer (OPA) in order to acquire all GVT's stocks.

Price offered: R$ 56 per share.

Date: 04/27/2010

OPA was successful and Vivendi acquired 16,647,327 ordinary stocks of GVT, what represents 93.58% of the stocks.

Vivendi's participation in GVT reached 99.17% (136.1 million of the 137.2 million shares in GVT's total capital).

Due to the acceptance of the offer by shareholders representing more than two thirds (2/3) of the shares qualified for the auction, GVT's record as an open company should be canceled with proper approval by the CVM.

Considering that the number of the shares left by Vivendi is less than 5% of GVT's capital, the company will promote a special meeting to approve the redemption of the remaining shares for the same price.

GVT starts to operate in Fortaleza (CE), João Pessoa and Campina Grande (PB)

On April 14th 2010, GVT started to operate in Fortaleza (CE), João Pessoa and Campina Grande (PB), with complete services of fixed telephony and broadband up to 100Mbps. The impletemntation requested an investment of R$ 95.1 million in the construction of a network with capacity for 107 thousand broadband and voice accesses, it corresponds to 30% of the geographic coverage in the region.

The period for pre-sales in this three cities showed the demand for broadband which represented about 90% of the sales and 96% of those are requests for speeds of 10 Mbps or higher. The Number portability was adopted in 50% of the fixes telephones pre-sales in these three cities.

GVT's plan aims to amplify from 40% to 45% its initial coverage, adding new villages to be covered in the second semester of this year and along 2011 with focus in the capitals of Fortaleza and Josão pessoa.

Breaking into Cerá and Paraíba is part of GVT's process of national expansion which started in 2007 by the beginning of operations in Belo Horizonte, followed by Contagem, Betim (MG) and Salvador (BA), in 2008; Vitória, Vila Velha and Serra (ES) besides Recife and Jaboatão dos Guararapes (PE) in 2009.

GVT was controlled by GVT (Holland), company established by financial investors, including Egaly Group (37.1%), Magnum Telecom (21.9%), IDB (16.5%), Discount Investment Corporation (16.5%), Quillon (6.7%) and others.

The company has been negotiating its shares in the new Bovespa's market (São Paulo Stock Market) in 02/15/07.

GVT has Local, LDN and LDI service authorization to Brazil (Regions I, II and III). It is the mirror company to Region II.

In February 2007 GVT was in operation in 61 cities of Region II and in the metropolitan areas of São Paulo (11), Rio de Janeiro(21) and Belo Horizonte (31), total of 64 cities in National territory.

In Sept/07 GVT announced the operation in Belo Horizonte with an initial offer of 30 thousand voice lines and 13 thousand ADSL access.

In Dec/07 GVT acquired Geodex, company that has its own network with more than 11 thousand km of optical fiber based on SDH and DWDM technologies. GVT available R$ 74.6 millions for the acquisition of shareholding control, and others around R$ 33.7 millions (considering the intire balance of Geodex's cash in the transaction) for the payment of obligations gotten by the acquired company.

In May/08, GVT announced the beginning of operation in Contagem (Minas Gerais) with a start offer of 18 thousand voice lines and until 14 thousand broad band access (ADSL).

In May/2008, GVT announced the beginning of operation in Salvador (Bahia) with a start offer of 45 thousand voice lines and until 45 thousand broadband access (ADSL). The operator invested US$ 27 million to cover the villages of Amaralina, Barra, Caminho das Árvores, Canela, Comércio, Graça, Jardim Apipema, Pituba and Vitória.

Telefonica increases offer for GVT

Vivendi announced on 11/13 having acquired stocks from GVT controllers for R$ 56.00 per share, what represented 37.9% of the total and optional purchase for 19.6¨of the shares, giving the company 57.5% of the stocks. The company will make a public offer in order to acquire the remaining 42.5%, reaching so 100% of the capital.

Telefonica, which had increased its offer from R$ 48.00 to 50.00 and had an auction set to November 19th, is out of this competition.

GVT's shareholdres approved in 11/3 the withdrawal of its social contract, what was making it difficult to sell the company. Who purchased more than 15% of the company's shares would have to pay a bonus of 25% on the highest value. This was one of the conditions for Vivendi and Telefonica to acquire GVT.

On 11/12/09, Anatel gave its approval so Telefonica or Vivendi could purchase GVT.

In Telefonica's case, Anatel stablished conditions to “promote effective competition and avoid the economic concentration in the market”. The main conditions were:

Telefonica and GVT must keep theirselves as autonomous companies for at least 5 years. This condition can be reviewed after two years.
In the next 10 years, Telefonica must invest in R&D corresponding in annual values to 100% of FUNTTEL.

Vivendi and Telefonica wnat to purchase GVT

Swarth Group which controls GVT announced in Sep/09 an agreement with Vivendi in order to sell the company control. Vivendi wants to acquire all company's shares through public offer of about R$ 42.00 per share. Vivendi might spend about US$ 2.9 billions in this trade.

Vivendi is a big French media group which controls, with Vodafone, SFR - second mobile carrier in France.

On 10/07/2009, Telefonica launched a public offer in order to acquire at least %1% of GVT's stocks in an auction to be held in Bovespa on 11/19/2009. The price offered by Telefonica reaches R$48.00 per share what would represent an investment of about R$ 6.5 billions.

Telefonica can make an offer because GVT has only ordinary share (with right of vote) and 65% of its stocks arean't owned by controllers.