Telmex, Bell Canada Form US$3.5B Joint Venture
- 08 June, 2000 12:01
FORT LAUDERDALE, FLA. (06/08/2000) - The dominant carriers in México and Canada will link hands and head down to South America, where they hope to cash in on a growing telecommunications market.
Teléfonos de México SA de CV (Telmex) and BCE Inc., through its publicly-traded subsidiary Bell Canada International Inc. (BCI), have signed an agreement to create a new telecommunications company to serve the South American market, the companies announced today.
BCI, the unit of BCE that handles business outside of Canada, and Telmex will each own half of the joint venture. They plan to inject US$1.8 billion in cash into the new company, which will be made up of the properties owned by the partners in South America.
The new company's initial capitalization is estimated at $3.5 billion, the companies said. Telmex and BCI already serves a total of 2.5 million customers in South America.
The joint venture will focus on fast-growing markets such as broadband communications, Internet services and wireless service, the companies said.
SBC Communications Inc. has been approached by Telmex and BCI to acquire up to a 25 percent stake in the new company. SBC plans to make a decision before the end of July.
BCE, which had revenue of $9.8 billion in 1999, owns 74 percent of BCI, which had revenue of $557.8 million in the same year, according to financial research company Hoover's Inc. Telmex had revenue of $7.9 billion in 1998, according to Hoover's.
BCI, in Montreal, Canada, can be reached at http://www.bci.ca/. Telmex, in Mexico City, México, can be reached at http://www.telmex.com.mx/.