Telefónica Close To Buying BellSouth Latin American Units
By Carlo Longino, Fri Mar 05 20:00:00 GMT 2004

The Spanish carrier is poised to become the biggest carrier in Latin America, while BellSouth looks to get some cash to make other strategic investments.

Telefónica is expected to announce Monday that it's buying the wireless assets of US Baby Bell BellSouth in 10 Latin American countries on Monday for nearly $6 billion. BellSouth is looking for funds to help pay for Cingular's massive takeover of AT&T Wireless, as well as to pump money into its wireline broadband division.

An interesting strategical schism is opening up, as US carriers pull back from foreign investments, while European operators like Telefónica and Vodafone are looking to expand across the globe. Cingular's other owner, SBC, is dumping its stake in Belgian carrier Belgacom later this month through an IPO.

The deal would give Telefónica over 40 million subscribers in 12 countries, and is seen as a good fit since in many of the countries, BellSouth's operations are quite strong. It could also signal the end of a wave of consolidation that's seen Telefónica and Mexico's America Móvil emerge as the Latin America's two powers.