BellSouth and its partners operate 10 wireless
companies in Latin America (Argentina, Chile, Colombia, Ecuador,
Guatemala, Nicaragua, Panama, Peru, Uruguay and Venezuela). Telefonica
has operations in seven Latin American countries (Brazil, Mexico,
Argentina, Peru, Chile, El Salvador and Guatemala). With the acquisition,
Telefonica will add six additional countries to its footprint and
10.5 million new customers.

According to Duane Ackerman, Chairman and
CEO of BellSouth, “the sale of our Latin American operations
enables us to continue to strengthen our domestic businesses. This
transaction improves our flexibility as we focus on our growth opportunities.”

The transaction is subject to due diligence,
governmental approvals and other closing conditions. It is expected
to close in stages as closing conditions are satisfied, with the
final closing expected to occur in the second half of 2004. BellSouth
expects to record a gain on the transaction based on the book value
at closing. Based on current book value, the after-tax gain would
be approximately $1.9 billion.

IP phone provider to expand retail channel

- Viper Networks signs distribution agreement with Best Telecom
Inc.

Talk is cheap claims the old adage, right? Well
on this day in technology, Viper Networks (OTC:VPER) and Best Telecom
bring words into action. On Feb. 24, 2004 Viper Networks signed
a distribution agreement with Best Telecom, Inc. to distribute the
Viper Networks’ vPhone, a USB telephone device for Voice over
Internet calling, and other VoIP (Voice over Internet Protocol)
products, into high volume chains like CompUSA.

Best Telecom, Inc. started in the prepaid phone
card business in 1994 as Tri-State Communications with a million-dollar
contract with MCI, and became a large distributor in Western Pennsylvania,
West Virginia and Eastern Ohio. A privately owned corporation, Best
Telecom, Inc. currently serves over 250 distributors in more than
40 states and has retail sales averaging approximately 40 million
dollars per year.

Rick Sallade, Best Telecom’s owner, spoke
energetically about where Best Telecom has been, and where they
are going. With this new parternship with Viper Networks, Sallade
expects to be in 28,000 locations within a year. He believes the
land line will become second to the vPhone because of the money
people will save. He boasts that 2.5 cents a minute to call overseas
will make the world even smaller. “I am excited about the
future of communication. The vPhone and other prepaid products will
spare dollars without sparing quality.”

Viper Networks’ vPhone will be available
to the consumer at an affordable price across the country and via
the Internet. Ron Weaver, Viper Networks chief executive officer,
remarked, “In the retail market, it comes down to resource
utilization and how fast products can be placed into several thousand
stores, and Best Telecom has the relationships in place to make
this happen quickly. They have built a formidable distribution company
and Viper Networks’ vPhone will be introduced into Best Telecom’s
channels using their proven approach to mass marketing.”

Regarding call quality, Weaver says, “The
more you know about Voice over the Internet, the more attractive
Viper Networks will be to you!” He continued to speak about
the quality of a call through the Internet, and noted, “The
quality is equal or better than the land telephone. And wherever
there is an Internet connection, with a USB hook-up, users can use
their vPhones.”

-- Jackie McNiff

Different telecom patterns for hispanics


- Hispanics cellular bills higher than national average

NEW YORK – Scarborough Research, a research
firm that specializes in identifying the shopping, media and lifestyle
patterns of consumers in the United States, released a study which
found that Hispanics spend more on their monthly household cellular
phone service than the national average. According to the study,
the average monthly household cellular bill for Hispanics is $67,
which is more than 10 percent higher than the national average of
$60. Nationally, 64 percent of Hispanics live in a household with
a cellular phone subscription. This is virtually equal to the national
cell phone penetration rate of 66 percent.

Hispanics also report spending more on their
monthly household long distance and local telephone service bills.
The average household long distance bill for Hispanics is $33 versus
$27 for all consumers. Hispanics average $36 per month for local
service which is slightly higher than the national average of $34.

Nineteen percent of Hispanic consumers who said
they or a member of their household subscribes to wireless service
plan to switch carriers in the next year. They are 22 percent more
likely than all wireless subscribers to do so.

“Hispanics are consuming products and services
at a rate equal to, and, in certain instances, greater than the
general population. These consumers, characterized as the ‘largest
minority group’ in the 2000 Census, are in fact a consumer
force to be reckoned with,” said Bob Cohen, Ph.D., President
and CEO, Scarborough Research. “In the case of telecom, Hispanics
tend to place great value on social and family ties, which makes
being connected very important. This cultural nuance places Hispanics
among the telecom industry’s best customers.”

Hispanics are 24 percent more likely than all
consumers to have spent $150 or more on their monthly household
cellular bill last month. They are 86 percent more likely than all
consumers to spend $100 or more on their monthly long distance service
and 41 percent more likely to spend $100 or more on their monthly
local phone service.

The Scarborough study also found local market
differences when it comes to household cell phone penetration among
Hispanics. Miami and New York lead local Hispanic markets* in cell
phone penetration. Seventy-four percent of Hispanics in Miami and
71 percent in New York said they or a member of their household
subscribes to cellular service.

“The growth of the Hispanic marketplace
in the U.S. is a national phenomenon, but marketing to these consumers
requires a local focus,” said Dr. Cohen. “Cultural differences,
shopping patterns and language preferences are important factors
that distinguish Hispanic segments and these are driven at the local
market level. Through better understanding Hispanics where they
live, marketers can maximize their multicultural budget, make more
informed media decisions, streamline the marketing process and expand
their brand’s reach.”

Illinois considers amendment

to Public Utilities Act

- Seeks input from industry leaders

Martin Sandoval, a Democratic State Senator in
Illinois, has sponsored an amendment to the Illinois Public Utilities
Act that would require prepaid service providers to file details
of their product offerings with the state ICC. Sandoval introduced
the amendment, numbered LB2731, in conjunction with Lieutenant Governor
Pat Quinn. It is currently in the Environment and Energy Committee,
of which Sandoval is a member.

As currently drafted, the amendment would require
prepaid calling service providers to provide the ICC with all terms
of the service offered, including “the expected number of
cards” it will introduce into Illinois and the rates and surcharges
associated with the cards. The amendment would require the Commission
to approve a certificate granting the service provider the right
to sell cards in Illinois.

Howard Segermark, Executive Director of the International
Prepaid Communications Association said, “The IPCA will be
working with the Illinois legislature to change this proposal so
the industry can live with it. But, we also think it is important
to first look at enforcement of current laws.” Segermark said
that he believes that existing laws on telecom regulation and deceptive
trade practices are not being enforced. He said it would be preferable
to focus on “those few phonecard firms” that are not
providing the consumer what they promise, before forcing legitimate
companies to bear added regulatory costs.

Attorney Edward Maldonado, of the Law Firm of Maldonado and Glenn
in Miami disagrees. He said, “While cards are specifically
mentioned, I think that prepaid services provided to Illinois consumers,
and disclosure to them, is the real thrust of the legislative intent
here. The way this is crafted is to require disclosure compliance
by someone with knowledge of the company’s policies and practices.
It’s all about protecting consumers and retailers.”

The certificate would include details about the
service provider and corporate officers, along with the approved
rates and terms, and would be required to be available at each retail
location where the cards are sold. Fines for non-compliance would
be based on the Commission’s review, and could be up to $50
or five times the value of the card, whichever is greater, fined
against the retailer.

Attorney Rishi Garg, Policy Advisor for the Lieutenant
Governor, is seeking comment from industry participants on the amendment
before it is enacted into law. He can be contacted at Rishi_Garg@ltgov.state.il.us.