AT&T Latin America Corp., a subsidiary founded last year by AT&T Corp. to offer telecommunications services to businesses in Latin America, began trading its Class A common shares on The Nasdaq Stock Market on Tuesday after completing its merger with FirstCom Corp. on Monday.
AT&T Latin America, which bought a carrier in Brazil in 1999 and another one in Argentina this year, adds operations in Chile, Colombia and Perú with the FirstCom merger. The company will compete against the dominant telcos in each of these countries and against alternative carriers like itself that want to take advantage of the region's pent-up demand for advanced telecommunications services. AT&T Latin America's strategy is to target businesses with offers of local and long-distance service, high-speed transmission of large amounts of data and very fast and continuous Internet connections, also known as broadband.
AT&T Latin America has about 1,100 employees. It will work together with other AT&T Corp. units and joint ventures in the region, such as AT&T Global Network Services, Concert and Alestra. Concert is a joint venture between AT&T and British Telecommunications PLC, while Alestra is a long-distance carrier in México that is partly owned by AT&T.
A wave of privatization and liberalization has been sweeping across Latin America's telecommunications markets in the past decade. As governments continue to allow competitors to enter markets previously ruled by inefficient monopolies, competitors with deep pockets, such as AT&T, Spain's Telefónica SA, Sprint Corp., France Telecom and WorldCom Inc., are investing in Latin America. Pyramid Research in Cambridge, Massachusetts, expects Latin America's telecommunications services market to grow from US$40 billion in 1998 to $92 billion in 2004.
AT&T Latin America is trading under the symbol ATTL. AT&T Latin America's share price was at $17.50 in early afternoon trading.The company's starting share price on Tuesday was Monday's closing price of FirstCom shares -- $17.69.
FirstCom's stock was traded on Nasdaq until the merger was finalized on Monday during a shareholder meeting. AT&T Latin America's appearance on the Nasdaq isn't an initial public offering, but rather what is known as a secondary distribution, or the public sale of previously issued securities, in this case those of FirstCom. AT&T filed for a secondary offering of 35 million shares of Class A common stock with the U.S. Securities and Exchange Commission (SEC) earlier this month. [See "AT&T LatAm Files for Stock Offering" Aug. 8.] In July, the company announced it would invest about $500 million in the Argentinian carrier it bought in February. [See "AT&T LatAm to Invest US$500M in Keytech" July 13.] The FirstCom merger had been in the works since 1999. FirstCom shareholders will receive one share of AT&T Latin America's Class A common stock for every FirstCom share they own. AT&T Corp. owns 58 percent of the company's Class B common shares, while FirstCom shareholders own 34 percent. About 7 percent will be owned by Promon Tecnologia SA, the former owner of Netstream, the carrier AT&T Latin America bought in Brazil in 1999. Owners of Class A common stock are entitled to one vote per share, while owners of Class B preferred stock have 10 votes per share.
As had been announced last year, FirstCom's chief executive officer, Patricio Northland, has been appointed president and CEO of AT&T Latin America.
AT&T Latin America, in Miami, can be reached at +1-305-459-6300. AT&T Corp., in Basking Ridge, New Jersey, is at 1-908-221-2000 or http://www.att.com/.