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March 2004

Emerging Markets Corporate Finance | |

BellSouth International And Colombia

"With its huge potential for growth and strategic location as a gateway to South America, Colombia is a natural fit for BellSouth. Our stake in Celumóvil positions us to participate in the growth of one of Latin America's most important markets."

— Charles C. Miller III, president of BellSouth International

In April 2000, BellSouth’s Corporate Strategy Department in Atlanta, Georgia was rushing to meet an important deadline regarding a new acquisition in Latin America. Senior management was considering a potential acquisition of two leading wireless telephone companies in Colombia. The prospective transaction includes the purchase of a 50.35% equity stake in Celumóvil, S.A., and 100% of Cocelco, S.A.

Celumóvil is a leading wireless provider with hundreds of thousands of subscribers in the Eastern and Atlantic Regions of Colombia. Cocelco is also a leading company in the provision of wireless communication services in the Western Region of Colombia. The acquisition would make BellSouth the leading wireless provider in Colombia and create the first company to offer national cover – competitors only had regional coverage.

However, BellSouth still needed to determine the fair value for these two assets. With a heavy late-evening rain pounding the outside of their office building, John Green and Jim Smith were scrambling back and forth between their cubicles. They were scheduled to make a presentation in the morning to the board of directors on the full valuation of the two companies. Colombia has been a target market for BellSouth since 1994, when the US multinational first bid but ultimately lost an auction for a wireless license in the country. Many questions still needed to be answered. Some of them were purely strategic: Should BellSouth go into Colombia given the economic, political and social situation of the county? There were many financial questions, such us what discount rate they should use to reflect the country risk? What are the key factors driving the future performance of these two companies? What methodology should John and Jim use to assess a fair value?

BellSouth was very active in the late 1980s and 1990s in acquiring cellular companies in Latin America. BellSouth had acquired major operators providing telecommunications services, including wireless, data, Internet access, e-commerce, long distance and other communications services in Argentina, Brazil, Chile, Ecuador, Nicaragua, Panama, Peru, Uruguay and Venezuela. John had a lot of experience in other BellSouth acquisitions in Latin America. However, he admitted that the fact that Colombia was the second largest market in Latin America made this acquisition both more challenging and exciting.

BellSouth Corporation

BELLSOUTH CORPORATION (NYSE: BLS) WAS BORN IN 1984 ALONG WITH SEVEN OTHER “BABY BELLS” WHEN AMERICAN TELECOMMUNICATIONS MONOPOLIST AT&T CAME TO AN AGREEMENT WITH THE U.S. DEPARTMENT OF JUSTICE OVER ANTI-TRUST ISSUES. BELLSOUTH’S INITIAL MARKET WAS LIMITED TO THE SOUTHEASTERN UNITED STATES WITH 96,000 EMPLOYEES, ASSETS OF US$21.5 BILLION AND 13.6 MILLION ACCESS LINES. IN ITS FIRST YEAR OF INDEPENDENT OPERATIONS, BELLSOUTH ACTIVATED THE FIRST CELLULAR SYSTEMS IN THE SOUTHEASTERN UNITED STATES IN THE MIAMI/FT. LAUDERDALE AREA. ONE YEAR LATER IT BEGAN OFFERING CELLULAR SERVICE IN ATLANTA AND TEN MORE METROPOLITAN AREAS IN THE SOUTHEAST US. IN 1990, BELLSOUTH BECAME THE WORLD'S FIRST COMPANY TO REACH 500,000 CELLULAR CUSTOMERS.

By 1999, they would grow to serve nearly 50 million local, long distance, Internet and wireless customers in the United States and 13 other countries, and would report more than $25.2 billion in annual revenues. Exhibits 1 - 3 contain historical financial statements for BellSouth.

BellSouth built a reputation as a very reliable service company. For example, during and after the 1987 disaster of Hurricane Hugo in South Carolina and North Carolina, BellSouth was able to keep the majority of service for the area's 928,000 access lines operational, including 911. Fortune magazine named BellSouth the “Most Admired” company in its peer group for five consecutive years following the Hugo disaster. In 2000, Fortune magazine named BellSouth one of America's Best Companies for Minorities and Internet Week placed BellSouth on the magazine's list of the “100 E-Businesses of the Year.”

In April 2000, BellSouth and SBC Communications agreed to combine their U.S. wireless operations. The new company, Cingular Wireless, was to be headquartered in Atlanta and would be the second largest wireless carrier in America, serving an expected 19 million subscribers by year-end and reaching 175 million potential customers. SBC would own 60 percent of the company and BellSouth 40 percent, based on the value of the assets each would contribute to the venture.

BellSouth was adding a new customer somewhere in the world every 10 seconds.

BellSouth International

BELLSOUTH INTERNATIONAL (BSI) WAS A WHOLLY-OWNED SUBSIDIARY OF BELLSOUTH THAT WAS CREATED IN 1985 TO MANAGE BELLSOUTH’S ACTIVITIES OUTSIDE THE UNITED STATES. BSI EXPANDED ITS INTERNATIONAL OPERATIONS THROUGH PARTNERSHIPS WITH THE PRINCIPAL LOCAL COMMUNICATIONS COMPANIES IN THE COUNTRIES IN WHICH IT OPERATED. BSI FIRST ENTERED LATIN AMERICA IN 1988 WHEN THEY WON A BID TO BUILD A CELLULAR NETWORK IN ARGENTINA, THE FIRST PRIVATE CELLULAR SYSTEM IN SOUTH AMERICA. BSI’S GOAL IN LATIN AMERICA WAS TO EXPAND OPERATIONS TO BECOME A FULL-SERVICE TELECOMMUNICATIONS PROVIDER FOR THE ENTIRE REGION.

By 1999, BSI operated wireless communications companies in 14 countries, 10 of which were Latin American nations (including Guatemala, in which a license was acquired but as of the beginning of 2000, operations were still being prepared to be launched) and four (Israel, China, Germany and Denmark) were in other parts of the world. Information on BSI operations in Latin America is included in Exhibit 4.

As of 2000, BSI had a leadership position in Latin America with a strong presence in 10 countries covering a geographical area of 224 million people.

Navigating The Maze Of Cellular Standards

THE FIRST MOBILE PHONES, AS VIEWED IN EARLY JAMES BOND FILMS, WERE LARGE BULKY DEVICES THAT CONTAINED POWERFUL TRANSMITTERS THAT COMMUNICATED WITH A TALL CENTRAL ANTENNA USING OBSOLETE ANALOG TECHNOLOGY. ADOPTERS OF THESE EARLY MOBILE PHONES WERE EXCITED ABOUT THE FREEDOM FROM FIXED PHONE LINES, BUT BOTH THE AIRTIME AND THE PHONES THEMSELVES WERE VERY EXPENSIVE. THE LIMITED POWER OF THE PHONE’S TRANSMITTER AND THE DISTANCE TO THE CENTRAL ANTENNA LIMITED THE RANGE OF THE PHONE. LIMITED CAPACITY AND LACK OF PRIVACY WERE THE HALLMARKS OF THIS EARLY MOBILE ERA.

The cellular era began in the 1980s when the Federal Communication Commission provided new frequencies for better mobile phone service (800 MHz). This enabled the move away from a single, centrally-located antenna, to many smaller antenna transmission areas called “cells” (hence cellular). When a user reaches the edge of one cell, they are “handed off” to the adjacent cell area. Users benefit from greater mobility due to the ability to transition between cells. The smaller transmission areas allow for less powerful transmitters in the phones, which reduces their size and weight. This system allows for greater coverage areas because the adding of additional cells to the network can fill service gaps and expand the footprint.

The cellular era began with analog technology (AMPS and n-AMPS) and was gradually making the transition to digital technology through the 1990s. For most people, transmission takes only 40% of the time during a two-way conversation, with the rest of the time taken up with pauses and listening. The digital technologies work by compressing this voice signal into shorter data packets and transmitting them more efficiently. The benefits of this include reduced noise and distortion, encryption possibilities, smaller and lighter phones, and simplified storage and retrieval of data.

Several technologies were applied to increase the voice quality and system capacity for the network. TDMA (Time Division Multiple Access) allows up to eight users to access a single narrow frequency band simultaneously by compressing the signal into shorter packets and then alternating very rapidly between the users to distribute the voice data to each phone in turn.

GSM (Global System for Mobile Communications) is an advanced breed of TDMA that operates on a 1900-MHz band. It was developed to allow for roaming and superior performance throughout Europe and which later spread to many other parts of the world. CDMA (Code Division Multiple Access) allows for enhanced quality, privacy, cost-effectiveness, capacity and flexibility. This technology works by assigning a “code” to each user, and broadcasts compressed packets of voice or other data over a much wider range of frequencies, a “spread spectrum” radio frequency technique. Each phone is programmed to recognize its assigned code and reassembles that compressed voice data.

The PCS era (Personal Communication Services) overlapped with the cellular era. PCS operates at the 1900-MHz frequency band, is digital, and offers some additional performance benefits over previous technologies. U.S.-based Sprint, for example, operates PCS technology.

Colombia Background and Cellular Market

WITH A POPULATION OF 41.5 MILLION PEOPLE, COLOMBIA IS THE SECOND MOST POPULOUS COUNTRY IN SOUTH AMERICA (BRAZIL HAS 163 MILLION PEOPLE). COLOMBIA GAINED ITS INDEPENDENCE FROM SPAIN IN 1810 AND SINCE THEN HAS BEEN MARRED BY MANY CIVIL WARS COSTING HUNDREDS OF THOUSANDS OF LIVES. TO THIS DAY, COLOMBIA SUFFERS FROM A LOCALIZED CIVIL WAR FUNDED BY DRUG TRADE AND LED BY TWO OF COLOMBIA’S LARGEST LEFT-WING GUERILLA GROUPS, THE NATIONAL LIBERATION ARMY (ELN), AND THE REVOLUTIONARY ARMED FORCED OF COLOMBIA (FARC).

The June 1998 presidential elections brought to power Andres Pastrana, a member of the Conservative Party who sought to bring a peaceful resolution to Colombia’s civil conflicts by engaging in talks with the FARC and ELN and by obtaining from the US a $1.3 billion-package to fight illegal drug trade. Yet the drug trade continued to grow, FARC and ELN showed little cooperation, and unemployment rose to high double digits. In April 2000, Colombia was slowly emerging from its worst recession since 1930. While 1999 real growth per capita declined 1.8%, 2000 was expected to yield a growth rate slightly above 1%, and between 2 and 4% the following four years.

Colombia's economy suffered from weak domestic and foreign demand, austere government budgets, and serious internal armed conflict. Two of Colombia's leading exports, oil and coffee, faced an uncertain future; new exploration was needed to offset declining oil production, while coffee harvests and prices were depressed. Colombian business leaders were calling for greater progress in solving the conflict with insurgent groups. On the positive side, several international financial institutions have praised the economic reforms introduced by President Pastrana and have pledged enough funding to cover Colombia's debt servicing costs. Exhibits 5A, 5B, and 5C include historical data on GDP and unemployment rates as well as some historical crime data that can be compared to crime rates in the US (Exhibit 6). Exhibit 7 provides income distribution in Colombia per percentile of population. Finally, Exhibit 8 provides historical economic data with respect to interest rates and exchange rates of pesos versus US dollars.

In 2000 Colombian telecommunications were already completely deregulated. However, the Pastrana administration was aware that the regulatory framework needed reviewing since there were still too many regulatory bodies and a lack of autonomy. The Pastrana Administration proposed legislation to consolidate the liberalization of the sector and encourage investment. The last step, which was the liberalization of the long distance sector, came in 1997, when licenses were awarded to two Colombian players.

Colombia opted for a unique route to liberalize its telecom sector. In contrast with other Latin American countries, Colombia opened local telephony and value-added services first. Some value-added players took advantage of the lack of regulation to offer callback services. This backdoor liberalization of the long distance market has effectively reduced the attractiveness of the long distance market. Thus, when the long distance sector was opened up via a licensing process, there were no bids from global telecom players. The key state-owned telephone companies were plagued by fierce labor unions, and the largest local operator, Telecom, had significant uncovered pension liabilities that have hindered privatization efforts. Following a failed attempt to privatize the national carrier in 1992 and a series of agreements with Telecom’s labor unions, the first significant privatization of a Colombian telecom, Empresa Telecomucaciones de Bogatá, took place in the second half of 1999, when 51% of the shares were offered to private investors.

The Colombian telecommunications sector accounted for approximately 3% of GDP in 2000 (compared to 5% in the U.S.), which indicates that in a country of 41 million people there is a potential huge market opportunity. The sector had been made even more attractive by the fact the government has provided incentives aimed at expanding the existing network to reach all areas of the country and at developing an information-driven society.

"We firmly believe that the full development of the people demands a modern telecommunication infrastructure capable to provide access to all citizens, without any discrimination whatsoever. The right to communicate must be understood as one of the fundamental human rights through which the developing world can close the gap separating it from the industrialized nations.”

- Claudia de Francisco, Minister of Communications

Cellular licenses were auctioned in 1994 and were awarded to six operators. For this purpose, Colombia was divided into three regions. Each region had two cellular operators – a private consortium and a mixed-capital consortium. The price paid per POP (unit of population covered by license) in 1994 ranged from US$23 for Celumóvil’s Eastern Region license to US$12 for Occel’s Western Region license. Table 1 presents major wireless operators in the country.

Band/POP represent the number of population in a certain band. The license contracts stipulated that the cellular operators used the calling party pays system and digital technology. Most cellular companies chose time division multiple access (TDMA). The licenses were originally awarded for ten years, but can be extended (with an additional payment) until 2014. Cellular operators must pay spectrum usage fees to the Ministry of Communications equivalent to 5% of gross revenue (excluding handset sales). The cellular exclusivity period ended in September 1999, after which the Government has the right to auction PCS licenses.

The Eastern Region has the highest population of the three regions, as it includes the capital Bogotá, where Colombia’s financial sector is based. The Western Region is the second in size and includes the industrial cities of Medellín and Cali. The Atlantic Coast Region has the lowest population density. The population of the three regions as a percentage of the total population of Colombia is 42% in Eastern, 37% in Western and 21% in Atlantic Coast. Analysts at Santander Investment estimated that 52% of Colombia’s GDP is generated in the Eastern Region and 35% and 13% in the Western and Atlantic Coast Regions, respectively. Exhibit 9 provides a regional distribution of wireless companies in Colombia. Exhibit 10 includes forecasted penetration rates of wireless telephony in the country.

Colombia had 1.8 million reported cellular subscribers in March 1999. Cellular penetration had reached 5% after five years of operations. Actual penetration was slightly lower as the definition of reported subscribers is open to different interpretations and some operators report subscribers that are not generating income and are unlikely to do so in the foreseeable future. Colombian cellular operators used a “calling party pays” billing methodology since the opening of the market which has been a significant factor in fueling subscriber growth. However, subscriber growth was slowing in 2000 as a result of economic recession.

Going into the 21st century, telecommunications is one of the fastest-growing areas of the Colombian economy. With a growing and young population and with a relatively low penetration rate in the telecommunications market (14% fixed line and 5% wireless), Colombia is perceived by most analysts as a market with significant growth opportunities in the wireless services industry. The Colombian government’s economic planning agency, Departamento Nacional de Planeación estimated sector investment to reach US$ 8.9 billion between 1999 and 2002, with US$ 4.4 billion coming from the private sector. Private sector investment was expected to be led by the privatization of ETB and the build-out of long-distance networks. Under Colombian legislation, there were no restrictions on foreign ownership.

Celumóvil, S.A.

Celumóvil started operations in July 1994, after Colombia’s wireless license auction. In 2000, the company is a leading wireless communications provider with approximately 466,000 subscribers in the Eastern and Atlantic Regions of Colombia. With revenues of approximately US$213 million in 1999, it is Colombia's second largest wireless telephone provider. Celumóvil's presence in the Eastern and Atlantic Regions comprises approximately 26 million POPs and six of the 10 largest cities in Colombia, including Bogotá, Baranquilla and Cartagena. Exhibit 11 provides some key financial data for Celumóvil. Table 2 shows shareholder distribution of Celumóvil.

Table 2: Shareholder distribution of Celumóvil, S.A. as of December 1999

|Valores Bavaria SA (VBSA) |74.45% |

|Chase Manhattan Bank |9.00% |

|AT&T Wireless |13.55% |

|Minor associates |3.00% |

Source: Newswires.

Valores Bavaria, SA (VBSA) was the largest shareholder of Celumóvil and was highly interested in having a multinational partner holding no more than 49% of company’s equity.

Cocelco, S.A.

Cocelco began its operations in 1994 also as a result of Colombia’s wireless auction. The company provides wireless communications services in the Western Region of Colombia, covering approximately 14.9 million inhabitants and more than 200,000 subscribers as of April 2000. The company is the leading wireless telecommunications services operator in some of the major cities in Colombia such as Cali, Medellín, Manizales, Pereira and Armenia. In December of 1999, Cocelco reported annual net revenues of US$84.8 million. Cocelco’s owners were a consortium of companies led by a group related to the Organización Sarmiento, the major financial services organization in Colombia and VBSA’s main competitor.

"Cocelco has become the leading operator in the Western Region because of the dedication of its employees."

- Luis Carlos Sarmiento, President of Cocelco

If both Colombian companies are finally acquired, BellSouth is planning to significantly reduce companies’ debt and increase working capital. BellSouth also planned to introduce new technology that would reposition the two new assets vis-à-vis their local competitors and to change the firms’ marketing focus: eliminating efforts to increase customer base and initiating efforts to retain higher-margin customers (customers are not very brand loyal and arbitrage among companies).

The Wireless Industry in Latin America

DURING THE LATE 90S, SOME EUROPEAN COMPANIES, SUCH AS TELEFÓNICA AND TELECOM ITALIA WERE VERY ACTIVE IN PURCHASING CELLULAR OPERATORS IN LATIN AMERICA. TABLE 3 PROVIDES A SUMMARY OF THE MOST SIGNIFICANT ACQUISITIONS IN THE CONTINENT.

Table 3: Main acquisitions in 1999/2000

|ACQUIRED COMPANY |COUNTRY |ACQUIRER | PRICE PER |

| | | |SUBSCRIBER |

|CONECEL |ECUADOR |TELMEX | $1,160 |

|SMARTCOM |CHILE |ENDESA |3,850 |

|BAJA CELULAR |MEXICO |MOTOROLA |1,283 |

|PROPEL MEXIXO |MEXICO |TELEFÓNICA |1,622 |

|MAXITE |N/A |TELEC. ITALIA |1,936 |

|AVERAGE | | | $1,970 |

As a result of these acquisitions, new GSM technologies expanded quickly throughout Latin America. Table 4 provides key data for select cellular operators in Latin America.

TABLE 4: MAIN CELLULAR OPERATORS IN LATIN AMERICA

|COMPANY |COUNTRY |SUBSCRIPTIONS (MLN) |REVENUES (US$ MLN) | |EBITDA (US$ MLN) |

| | | |2000E |2001E | |2000E |2001E |

|IUSACELL |MEXICO |1.5 | $58 | $68 | | $22 | $27 |

|TELE CELULAR SUL |BRAZIL |1.1 |249 | 246 | |97 | 90 |

|TELE CENTRO OESTE |BRAZIL |0.9 | 222 | 223 | |87 | 80 |

|TELE LESTE CELULAR |BRAZIL |0.5 | 128 | 130 | |24 | 37 |

|TELE NORDESTE CELULAR |BRAZIL |1.3 | 264 | 250 | | 84 | 84 |

|TELE NORTE CELULAR |BRAZIL |0.4 | 104 | 95 | | 32 | 32 |

|TELEMIG CELULAR PART. |BRAZIL |0.8 |197 | 198 | | 66 | 68 |

|AVERAGE | |0.9 |$174 | $173 | | $59 | $60 |

Exhibit 12 provides some additional information on cross-border mergers and acquisitions activities in Colombia. Exhibit 13, Exhibit 14 and Exhibit 15 include information on Average MOUs (Minutes of Use), monthly ARPUs (Average Revenue per User) and adoption rates respectively for several countries in Latin America. Exhibit 16 provides demographics for Latin American countries.

THE DECISION

JOHN AND JIM WERE SUMMING ALL FACTORS TO BE INCLUDED IN THEIR STRATEGIC ANALYSIS AND FINANCIAL VALUATION. THEY WERE BOTH FASCINATED BY THE POTENTIAL GROWTH OPPORTUNITY AND MARKET SIZE THAT COLOMBIA AS THE SECOND MOST POPULOUS COUNTRY IN SOUTH AMERICA OFFERED. FURTHERMORE, ALTHOUGH THE TELECOM INDUSTRY REPRESENTED A SIGNIFICANT PERCENTAGE OF COLOMBIA’S GDP, LOCAL TECHNOLOGY WAS STILL SIGNIFICANTLY BELOW BELLSOUTH’S STANDARDS, OFFERING AN OPPORTUNITY TO INTRODUCE NEW SERVICES AND QUICKLY CAPTURE A TECHNOLOGICAL ADVANTAGE VIS-À-VIS CURRENT LOCAL PLAYERS.

The economic reforms introduced by President Pastrana were paving the way for increased international investments and the economic recession was showing signs of ending. However, Colombia was still a very unsafe country and many social uncertainties remained. BellSouth remained committed to becoming the largest Latin American telecom service provider. Colombia, in that respect offered some strategic advantages that Jim and John hoped to convey to BellSouth’s Board. The Board was also looking for some discussion of potential alternatives to enter Colombia: Was buying Cocelco and Celumóvil the only one? The board was still aware of BellSouth’s loss in 1994 of the wireless license auction.

They also knew that the Board would base much of its decision on the presented valuation data. Finding a proper discount rate was a challenging task in a country such as Colombia. At the same time, they were aware that they needed to keep an eye on market transactions in the region as a tool to judge current asset valuations.

The transaction seemed to be a great strategic opportunity to expand in Latin America. Colombia was the piece of the puzzle that was missing to build full coverage from Argentina to Guatemala and Venezuela. In addition to these factors, John was also considering all the previous acquisitions of BSI (a timeline of events is included in Exhibit 17). All these questions were still in the air that late evening as John and Jim sipped on their triple café mochas from Starbucks.

Exhibit 1 BellSouth Historical Balance Sheets

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Source: BellSouth Annual Reports

Exhibit 2 BellSouth Historical Income Statements

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Source: BellSouth Annual Reports

Exhibit 3 BellSouth Historical Cash Flow Statements

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Source: BellSouth Annual Reports 1999

Exhibit 4 BSI operation in Latin America

Exhibit 5A: GDP and Unemployment in Colombia 1970-1999

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Source: United Nations Statistics Department, Colombia National Statistics Agency (DANE)

Exhibit 5B: Drug Trafficking as a Percentage of GDP

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Exhibit 5C: Homicide Rates in Colombia (per 100,000 population), 1946-2000

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Exhibit 6: Homicide Rates in the US (per 100,000 population), 1900-2000

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Source: US Department of Justice.

Exhibit 7: Income Distribution of Colombian Population

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Source: Inter-American Development Bank; World Development Indicators, 1997; casewriters’ estimates.

Exhibit 8A: Historical Inflation and Growth Rates in Colombia

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Exhibit 8B: Exchange Rate: Colombian Pesos per US Dollar

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Source: The Strategis Group, Inc.

Exhibit 9: Regional Colombian Wireless Breakdown

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Source: Santander Investment.

Exhibit 10: Forecasted Mobile Phone Penetration Rates

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Source: The Strategis Group, Inc.

Exhibit 11: Selected Financial Data for Celumóvil (Pesos Millions)

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Exhibit 12A: Cross-Border Merger and Acquisition Activity in Colombia

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Exhibit 12B: Historical Merger and Acquisition Activity in Colombia

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Exhibit 13: National Average Mobile Monthly MOUs (Minutes of Use)

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Exhibit 14: National Monthly ARPUs (Average Revenue Per User)

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Exhibit 15: Historical and Projected Cellular Adoption Profiles in Latin America

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Exhibit 16: Demographics of Latin American Countries, 1999

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Exhibit 17: Timeline of Events

1984 The 8 “Baby Bells” are spun off from AT&T

Jul-85 BellSouth creates BellSouth International to manage its activities outside the U.S.

Oct-85 First BSI overseas office opens in Hong Kong

Jul-88 BSI-led consortium wins bid for license to build Argentine cellular network

Nov-89 Cellular services launched in Argentina

Dec-90 BellSouth-led consortium obtains license to develop and run a cellular system in Uruguay

May-91 BellSouth-led consortium signs license agreement with Venezuelan government to provide national cellular service

Nov-91 BSI begins operations in Venezuela and Uruguay

Sep-91 Chilean subsidiary begins offering domestic and international long-distance service

1994 Colombia auctions cellular licenses. BSI bids but does not win any license

Feb-96 BSI-led consortium wins license to build and operate a cellular system in Panama

Jan-97 Acquisition of Peruvian wireless paging company CATV

BSI wins two cellular licenses in Brazil.

Mar-97 BSI acquires 49% of interest in Nicaragua’s only wireless company and majority interest in Ecuador's nationwide cellular company.

Oct-99 BSI strengthens its international strategy with a nationwide wireless license in Guatemala.

Exhibit 18: Key Financial Data

Institutional Investor Country Credit Rating

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Colombian Sovereign Yield Spreads

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|[pic] | | | | | | |

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Argentina: Movicom BellSouth

Cellular, Internet, data transmission, Long distance/local services

Uruguay: Movicom BellSouth

Cellular, Internet

Chile: BellSouth

Cellular, Data, long distance

Guatemala: BellSouth

Cellular

Panamá: Bellsouth

Data transmission

Ecuador: Bellsouth

Cellular

Perú: Bellsouth

Cellular, data

Brazil: BCP Telecommunicações,S.A.

Cellular

Venezuela: Telcel BellSouth

Cellular, Internet and data

Nicaragua: Bellsouth

Cellular, public telephone

Colombia: Cocelco and Celumóvil

Cellular

In negotiations or to be launched in 2000

Table 1: Colombia’s main wireless operators

|Operator |Region |Amount (MM) |Population (MM) |Price/POP |

|Celumóvil |Eastern |$329.50 |14.58 |$22.6 |

|Comcel |Eastern |313.00 |14.58 |21.5 |

|Celumóvil de la Costa |Atlantic |116.90 |7.27 |16.1 |

|Celcaribe |Atlantic |111.10 |7.27 |15.3 |

|Cocelco |Western |156.50 |12.67 |12.4 |

|Occel |Western |148.70 |12.67 |11.7 |

Sources: Ministry of Communications and Santander Investment.

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