Algar to invest BRL1bn over five years

21 Jul 2010

Brazilian group Algar Telecom has revealed plans to invest BRL1 billion (USD556 million) over the next five years, with a focus on ramping up its network expansion programme. Algar Telecom, the communications arm of the Algar Group, last week confirmed a partnership with the Energy Company of Minas Gerais (Cemig) to provide telecommunications services to residential users in condominiums via the utility firm’s network. Financial details of the deal were not disclosed, but the Algar financial director, Tatiana Panati, said the deal will include voice, broadband and TV services. ‘It is our first initiative outside the concession area – the area of expansion – not focused on small and medium enterprises. We have a very high expectation from this partnership,’ she said.

The USD556 million spend will now be used to expand the operators’ capabilities to provide data communications, especially broadband and video services. Algar hopes the investment will help it to migrate to a next generation network (NGN) platform. The telco expects to complete the upgrade to an all-IP network for voice and data within three to four years, Tatiana added. The Algar official said the monies needed to fund the growth plan will come in the main from internal cash generation.

Brazil, Algar Telecom (formerly CTBC [Fixa])