Portugal Telecom

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Portugal Telecom SGPS SA
Type Sociedade Anónima
Traded as EuronextPTC, NYSEPT
Industry Telecommunications
Founded 1994
Headquarters Lisbon, Portugal
Key people Henrique Granadeiro (CEO)
Products Fixedline & Mobile Telephony
Fixedline & Mobile Internet
Digital Television
IT Services
Revenue 3.742 billion (2010)[1]
Operating income €413.8 million (2010)[1]
Profit €5.672 billion (2010)[1]
Total assets €15.17 billion (end 2010)[1]
Total equity €4.609 billion (end 2010)[1]
Employees 33,520 (end 2010)[1]
Parent CorpCo
Subsidiaries PT Comunicações, TMN
Website www.telecom.pt

Portugal Telecom SGPS SA (also known as PT) is the largest telecommunications service provider in Portugal. Although it operates mainly in Portugal and Brazil, it has also a significant presence in Guinea-Bissau, Cape Verde, Mozambique, Timor-Leste, Angola, Kenya, and São Tomé and Príncipe.

Due to its large market share, Portugal Telecom is considered a de facto monopoly in fixed telephony in Portugal.

History[edit]

The first telephone experiments in Portugal connected Carcavelos to the Central do Cabo in Lisbon, in 1877. In 1882, the Edison Gower-Bell Telephone Company was established in both Lisbon and Porto, to explore the respective telephone service concessions. In 1887, the concession was transferred to APT - The Anglo Portuguese Telephone Company, which was kept by the latter until 1968, the year in which the Public Company "Telefones de Lisboa e Porto" (TLP) was created. The Post Office, Telegraphs and Telephones (CTT) explored until this present day, the telephone service in the rest of the country. For the exploration of radiotelegraphy and wireless telephone, a contract with the Marconi's Wireless Telegraphy Company concession was confirmed in 1922. In 1925, the "Companhia Portuguesa Rádio Marconi" (CPRM) was set up and took on all responsibilities of the previous concession.

In 1970, CTT became a Public Company and in 1989, the TLP was transformed into a Limited Company, and was completely controlled by the State.

In 1992, the Portuguese government and the Public Service Television Corporation RTP agreed to separate the transmitter network from the rest of the corporation, transferring it to a recently created state-owned company named "Teledifusão de Portugal" (TDP). The purpose of this was to explore a nationwide TV broadcasting network available for any TV station in Portugal to request its services. At the time, RTP (a "native" client of TDP) was having competition for the first time since its creation in the 1950s. SIC required the services of TDP, but TVI decided to create its own transmitter Network (RETI).

In 1992, CTT became a Limited Company with public capital and the Comunicações Nacionais, SPGS, SA (CN) was created, a state holding company responsible for the managing of all state participation within the sector - CTT, TLP, CPRM e TDP. In this same year, the Telecommunications developed by CTT was automatized through the creation of Telecom Portugal, SA, giving CTT the possibility to dedicate itself exclusively to the Post Office. With this, Portugal had its own telecommunications network which was being explored by 3 operators: the TLP explored the telephone services in the Lisbon and Porto areas, Telecom Portugal was responsible for the remaining national, European and Mediterranean communications; and Marconi took hold of international traffic. In 1994, a unique national telecommunications operator was created with the fusion of companies within the CN State holding: Portugal Telecom, SA (PT), with the fusion of Telecom Portugal, TLP and TDP.

Portugal Telecom was the only telephone operator in Portugal, being a monopoly, until 1994, when the government gradually retired its control over the corporation and, in 2000, Portugal Telecom became a publicly owned company. Since then, it has held a dominant position in the liberalized Portuguese market.

Headquarters in Lisbon

In early 2007, the Portuguese conglomerate, Sonae's takeover offer for Portugal Telecom failed. PT's board rejected an initial bid, worth EUR 11.1 bn, in February 2006. Sonae.com's takeover bid opposed Belmiro de Azevedo (founder and historical chairman of Sonae holding company) and his son Paulo Azevedo (then the head officer of Sonae.com telecommunications operator) to the investor José Berardo and PT's administrators Zeinal Bava and Henrique Granadeiro.[clarification needed] In April 2007 the European Commission gave an ultimatum to the Portuguese government ordering it to give up on the 500 golden shares pack that it owned on the company and that enable special veto powers to the government on vital issues. This could give the government a decisive role in the bid by any company to buy Portugal Telecom. In November 2007, Portugal Telecom spun off its media assets (PT Multimédia), that included TV Cabo and Lusomundo Cinemas. In January 2008, the European Commission began legal proceedings against the Portuguese government over its 'golden share' in incumbent telecoms operator Portugal Telecom. The 500 golden shares with extended voting rights, allowing it to block potential takeover bids, were the reason for the Commission's legal action. Similarly, in November 2005, the Commission had forced the Spanish government to give up its golden share in the other telecommunications' major player in the Iberian Peninsula, the Spanish telecoms giant Telefónica.

In December 2009, Portugal Telecom purchased RETI.

In October 2, 2013, Portugal Telecom and Brazil's Oi said they would combine operations to form a new Brazil-based company with more than 100 million subscribers.[2] The resulting company's provisional name is CorpCo.

Operations[edit]

Domestic[edit]

Portugal Telecom owns PT Comunicações, the largest landline operator in Portugal.[3] Its operating brands include meo, a triple play service provider and SAPO, an ISP and producer of web content. Portugal Telecom also owns Telecomunicações Móveis Nacionais (TMN), the largest mobile phone operator in the country;[3] PT PRO, one of the largest shared services companies in Europe; and PT Prime, an IT services company.[3]

PT also owns 25% of Páginas Amarelas, S.A., the publisher of the Portuguese edition of the Yellow Pages.[1]

International[edit]

Brazil is Portugal Telecom's second-largest market. PT agreed to acquire 22.4% of Telemar Norte Leste (Oi), the country's largest telecommunications firm, in July 2010.[4] Separately it also holds 29% of UOL, a major Brazil-based ISP and online service provider; and is the sole owner of Dedic, a call centre operator.[3] PT previously held 29.7% of Vivo, the country's largest mobile phone network, which it controlled jointly with Telefónica. It agreed however to sell its stake to Telefónica for €7.5 billion in July 2010.[4]

Portugal Telecom's other main international assets are based in Africa and Asia, largely in Portuguese-speaking nations. Through a 75%-owned investment holding company Africatel, PT holds an effective 18.75% of Angola's largest mobile operator Unitel; 30% of Cabo Verde Telecom (CVT) of Cape Verde; 38.25% of Companhia Santomense de Telecomunicações (CST) of São Tomé and Príncipe; and 25.5% of the Namibian mobile firm MTC.[3] The firm sold a 32% shareholding in Méditel of Morocco in September 2009.[5]

In Asia Portugal Telecom owns 41.1% of Timor Telecom of East Timor.

Ownership[edit]

Portugal Telecom is a publicly traded company. As of 15 November 2011 its major stockholders are Espírito Santo Financial Group (11.30%), RS Holding (10.05%), Capital Research and Management (9.97%), Oi (7.00%), Caixa Geral de Depósitos (6.23%), Brandes Investment Partners (5.24%) and Norges Bank (5.01%).

After privatisation the Portuguese government owned 500 golden shares in PT, which carried special rights over the company's management decisions and blocked any one shareholder from holding more than 10% of voting rights within the company.[6] The golden shares were the subject of a long running dispute between the government and the European Commission, which alleged that their existence was illegal under EU law. Portugal argued that the shares were in the public interest. A case brought before the European Court of Justice by the Commission to force the government to cede its shares resulted in the announcement of their abolition in July 2011.[7]

On 2 October 2013 it was reported that Portugal Telecom and Brazil's Oi are to Merge to create a Brazil based company.[8]

Notes[edit]

  1. ^ a b c d e f g "Annual Report 2010". Portugal Telecom. Retrieved 18 November 2011. 
  2. ^ http://online.wsj.com/news/articles/SB10001424052702304906704579110693710265598
  3. ^ a b c d e "Corporate structure". Portugal Telecom. 1 September 2009. Retrieved 23 January 2010. 
  4. ^ a b Minder, Raphael (28 July 2010). "Telefónica Wins Full Control of Brazil Phone Venture". The New York Times. Retrieved 31 July 2010. 
  5. ^ Tavares, Elisabete; Khalip, Andrei; MacInnes, Judy (1 September 2009). "Portugal Telecom, Telefonica sell Meditel stakes". Reuters. Retrieved 23 January 2010. 
  6. ^ Wise, Peter (16 February 2007). "Sonaecom lifts Portugal Telecom bid". Financial Times. Retrieved 23 January 2010. 
  7. ^ Goncalves, Sergio; Alvarenga, Daniel (5 July 2011). "Portugal scraps golden shares in utilities". Reuters. Retrieved 18 November 2011. 
  8. ^ "Portugal Telecom and Brazil's Oi to Merge". Wall Street Journal. 2 October 2013. Retrieved 2 October 2013. 

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