After conquering the Brazilian mobile market, Portugal Telecom is eyeing a move into fast-growing mainland China by using the former Portuguese enclave of Macau as a foothold.
"China is on the brink of a new phase in its history. It is a magic moment which must be taken advantage of," the chief executive of the firm, Miguel Horta e Costa, told business daily Diario Economico last week at the end of a tour of China.
"For this reason we are looking into opportunities. But we do so cautiously, in a country of this scale there can be no rush, no errors in judgment."
During his visit to Asia, Horta e Costa met with the heads of China Mobile Communications Corp (中國移動通信), the world's biggest mobile carrier by subscribers, as well as with top officials from China Unicom Ltd (中國聯通), the nation's other mobile carrier.
He also held talks with the leaders of China Telecom Corp (中國電信) and China Netcom (中國 網通), the country's major fixed-line operators, in a tour which took him to Beijing, Hong Kong and Macau.
China is already the world's largest mobile phone market with more than 300 million subscribers, a figure which is expected to rise to 556 million by 2010.
The country is also expected to post a sharp rise in the number of Internet, cable TV and fixed-line telephone subscribers as strong economic growth fuels demand from a growing numbers of Chinese for those services.
Portugal Telecom currently holds a 28 percent stake in CTM, Macau's public telecoms operator which offers fixed, mobile and Internet services in the tiny territory of some 500,000 people.
It also has a 55 percent stake in cable television provider TV Cabo Macau as well as minority stakes in two satellite television firms in Macau, Telesat and Cosmos.
Earlier this week Horta e Costa told reporters that TV Cabo Macau would be a priority in the firm's strategy for growth in China.
He added that Portugal Telecom also aims to explore ways to provide data transmission services to the many casinos which exist or are being planned for Macau.
"Portugal Telecom has competitive advantages due to its presence in the territory and the ancestral ties of Portugal to Macau," he said.
The aim is to use Macau as a base to eventually expand into other areas in China and capitalize on the nation's huge growth potential as it has already done in former Portuguese colony Brazil.
Portugal Telecom has poured millions of euros into Brazil in recent years and, together with Spain's Telefonica, it now has a joint venture in the Latin American country called Brasilcel, which controls 44 percent of the Brazilian mobile market.
Vivo, Brasilcel's mobile operator in Brazil, has over 23 million clients in the country.
But analysts caution that Portugal Telecom is too small to carry out the huge investments which would be needed to gain a strong presence in China and the firm must keep its focus on deepening its position in Brazil where it faces steep competition.
"Before seeing, say 100 million euros invested in Asia, I would rather see the same 100 million euros invested in Brazil," said Ricardo Pimentel Seara, a telecoms analyst with Portuguese bank BPI, in a telephone interview.
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