Bloomberg News

Net Declines Most in 2 Weeks on Embratel Competition

April 11, 2008

Net Servicos de Comunicacao SA, Brazil's biggest cable-TV operator, fell the most in two weeks on concern competition will increase after Embratel Participacoes SA (EBTP3) said it wants to provide pay-TV services.

Net declined 3.5 percent to 20.80 reais in Sao Paulo trading, the biggest drop since March 28. The shares have tumbled 23 percent over the past year, compared with a 33 percent gain for Brazil's Bovespa index.

Embratel Participacoes SA, the Brazilian unit of Telefonos de Mexico SAB and a holder of 49 percent of Net, petitioned Brazil's telecommunications regulator for a license to begin direct-to-home satellite TV operations, Embratel said today in an e-mail to Bloomberg News.

``The strategy behind this is to use this in a complementary form'' to Net's cable service, Raymond James & Associates analyst Alexandre Garcia said in an interview. ``We can't be 100 percent certain that this won't cannibalize the cable-TV service of Net.''

Embratel declined to give additional details about the license request. Reuters reported yesterday that Embratel had filed the request.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

To contact the editor responsible for this story: Chris Nagi at at chrisnagi@bloomberg.net.


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