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Portugal Telecom SGPS SA - Company Report
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Company Reports are concise reports that provide a review of the company's activities, corporate strategy and recent developments.
Portugal Telecom SGPS SA provides a range of telecommunications and multimedia services in Portugal, including wireline services through PT Comunicações, PT Prime, PT.com, and PT Corporate, mobile services through TMN - Telecomunicações Móveis Nacionais SA, and multimedia services via PT Multimédia and its subsidiaries (in particular TV Cabo and PT Conteúdos), although its 58.43% stake in PT Multimédia is due to be spun-off in early-November 2007, as one of the key elements of the shareholder remuneration package announced in February 2007 (see below). Portugal Telecom also has a strong presence in the Brazilian mobile market through its strategic alliance with Telefónica SA of Spain, under which it created Brasilcel NV on December 27, 2002 (subsequently rebranded Vivo on April 8, 2003). [Both Vivo and Telefónica are profiled separately.] Meanwhile, Investimentos Internacionais - Consultoria Internacional SA (PT II) was created by Portugal Telecom in 2004, to manage all of its international businesses (other than its investment in Vivo), including investments in Brazil, Africa, and Asia. As a result of the privatisation process between June 1, 1995 and December 4, 2000, Portugal Telecom’s share capital is mainly owned by private shareholders. As of December 31, 2006, the Portuguese state owned, either directly or indirectly, 7% of the total ordinary shares and all 500 of Portugal Telecom's A Shares. Telefónica also held 9.96% of Portugal Telecom’s share capital, although that increased in October 2007 as part of Portugal Telecom's share buyback programme (see below). The shares of Portugal Telecom are traded on the Euronext Lisbon Stock Exchange and on the New York Stock Exchange (NYSE). In February 2007, in connection with the failed hostile takeover bid from rival Portuguese operator, SonaeCom, Portugal Telecom announced a shareholder remuneration package comprised of a €2.1 billion share buyback, a €0.475 per share dividend related to the year 2006, a €0.575 per share dividend related to years 2007 and 2008, and the spin-off of PT Multimédia. The purpose of the share buyback programme, which is expected to be concluded by April 2008, is to reduce its share capital by up to 16.5%.
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