Movistar Announces Restructuring for Chapter 11 Protection
The Puerto Rican unit of mobile operator, Movistar has announced a major restructuring plan involving a US$110mn share transfer as the company applies for chapter 11 protection, local press reported.
The company is owned by Newcomm Wireless, a joint venture between US-based wireless operator Clearcom and Spanish telecoms giant Telefónica. Newcomm said it will sell the shares to an investment group headed by capital investment firms Columbia Capital and MC Venture Partners. The sale amounts to 35% of the company.
Additionally, Newcomm has secured financing for a US$38mn infrastructure upgrade of its CDMAone mobile network to EVDO technology. The network upgrades should be ready in April 2007, local daily El Vocero reported.
According to Signals Consulting president, José Otero, the restructuring is long overdue as Movistar is losing market share in a highly competitive sector of six mobile operators. Furthermore, the company needs to upgrade its network if it is to compete better.
"Movistar has mostly a CDMAone network, which needs to be upgraded, and competes mostly on low rate plans," Otero told BNamericas in an email response to questions.
Mexican mobile group América Móvil is positioning itself to enter the market through an acquisition of mobile operator PRT, a unit of US telco Verizon Wireless, which is still awaiting regulatory approval.
BNAmericas.com"
Posted to the site on 5th December 2006