Brazilian regulator approves sale of Net Servicos to Telmex.(Telefonos de Mexico S.A. de C.V. to acquire shares of Net Servicos de Comunicacao)(Brief Article)

Latin America Telecom, January, 2005

In an ordinary meeting held by the Directive Council of the telecom regulator, Anatel approved the sale of up to 49 percent of the cable TV operator to Mexican-based and controlling shareholder of Embratel, Telmex. Anatel expects 51 percent of Net Servicos to stay in the hands of Brazilian investors.

Pedro Ziller de Araujo, president of Anatel, explained that the approval is based on the Cable Law No. 8977 that limits foreign ownership in the sector to 49 percent. Anatel still needs to finalize a study to determine the level of concentration in the sector. Meanwhile, Telmex is keen on acquiring a controlling interest in Net Servicos and is lobbying to have the aforementioned law annulled.