The Brazilian Market – A Carnival of Opportunities

1. Opportunities in Brazil, June 23rd @ MIT Forum
The Incredible Success of GVT
(an Insider's Point of View)
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2. The Story in a Nut Shell
In 1999 winning an un-attractive license in the
central south of Brazil for fix telephony in total cost
of USD 100 K as part of privatization process
In 2000 an arrangement of Equity of USD 350 M
with USD 550 M vendors loans is negotiated
In 2001 launching service in 3 cities in Brazil,
company staff is about 150 employees
2002 – 2006: GVT grows under severe financial
difficulties to 1800 employees, USD 300 M annual
REV, 35% EBITDA, covering 60 cities
2007 – Debt restructure & IPO in valuation of about
USD 1.5 Billion
2009 – Sale to Vivendi in USD 4.8 Billion

3. Main Challenges
Group of Entrepreneurs without telecom experience
and without a Telco operator back
Collapse of the dot com bubble in the end of 2000
Depression of the Brazilian economy
Anti competitive actions by BRT
Hiring high level managers, combine with Ex-pats
Debt burden with impossible financial covenants
Aggressive population coverage obligation
Severe collection issues
Negative Cash flow and cash balance shortage
Closed financial markets
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4. Success Factors
Unified Shareholders group
Choosing the right strategy and technology
Hands on “Israeli management” style
Creation of performance based company with a
winning spirit
The right blend between Locals and expats
“Long distance running”, even in no light situation
No compromise in performance, regardless the price
Perfect execution methodology
United management
Choosing the right advisors
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5. Thank
You
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