StarMedia Goes Wireless in Brazil

FORT LAUDERDALE, FLA. (03/15/2000) - After Wall Street pounded its stock earlier this week, StarMedia Network Inc. is now setting its sights on the land of samba with a partnership to offer wireless Internet services.

Today, StarMedia announced a partnership with Telet, which offers cellular phone service in the Brazilian state Rio Grande do Sul. Through this new service, called Claro On-line, Telet's 230,000 subscribers will be able to receive e-mail messages, short-text messages and news via their cellular phones.

Subscribers can tailor the types of news they want to receive at http://www.claroonline.com.br/. That Web site can also be used to send text messages to subscribers. Eventually, StarMedia believes that wireless devices will be used to conduct electronic-commerce transactions as well.

Today's partnership is the fourth such agreement StarMedia has reached in Brazil, and proof that the company is betting that wireless devices will be widely used to access Internet services and content in Latin America.

StarMedia has already signed similar agreements with Telemig Celular, Amazonia Celular and ATL, three carriers who cover different regions in Brazil, which is Latin America's largest IT, Internet and telecommunications market.

There were 5.8 million Internet users in Brazil last year, a figure expected to rise to 29.1 million in 2005, according to market research company Jupiter Communications Inc. based in New York.

Although the level of PC penetration remains low in Latin America compared with that in other regions of the world, the adoption of wireless devices, especially cellular phones, has been robust in the region, due in large part to the poor quality and unavailability of traditional phone service.

The number of cellular subscribers in Brazil almost doubled to 13.5 million in 1999, a figure expected to rise to 40 million by 2007, according to a recent report from The Strategis Group in Washington. [See "Explosive Cellular Growth Expected in Brazil," Feb. 24.]Brazil's population is estimated at 172 million.

StarMedia operates a variety of Web sites, portals and search engines aimed primarily at Latin Americans, although the company also targets Spanish- and Portuguese-speakers in the U.S., Spain and elsewhere in the world.

The company's stock plunged 34 percent on Monday after two analyst firms downgraded its rating. [See "UPDATE - StarMedia's Shares Plunge on Analyst Downgrades," March 13.] The stock still hasn't recovered, closing today at US$32.37, compared with its Friday closing price of $50.

Telet is at http://www.telet.com.br/. StarMedia, in New York, is at http://www.starmedia.com/.

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