BCI and Telmex Join in South American Telecom Project

MEXICO CITY June 12 -- Bell Canada International Inc. (BCI), a subsidiary of BCE Inc., and Telefonos de Mexico (Telmex) have agreed to create a facilities-based communications company in order to launch their expansion in South America. Telmex and BCI will hold equal economic interests in the venture.
Network development will begin in Brazil, Colombia and Venezuela, and eventually expand into other regional markets, the companies said. With BCI's South American assets and Telmex's Brazilian assets the new company is slated to start with an initial sum of $3.5 billion US. The companies have also agreed to spruce up their existing South American businesses with $1.8 billion (US) in cash and cash commitments.
SBC Communications Inc. has also expressed interest in participating in the new venture and has entered into discussions with Telmex and BCI. BCI and Telmex have offered SBC Communications the right to purchase up to a 25 percent interest in the new company in exchange for assets and cash. SBC Communications' decision to exercise this right is expected by the end of July.