ChinaTel Eyes LatAm Expansion

US-based telecom ChinaTel is looking for opportunities to expand in LatAm, particularly in CentAm and the Caribbean, says Ryan Alvarez, vice president of strategic planning. “We are looking at developing countries that need infrastructure for internet access,” he tells LatinFinance. ChinaTel, which is investing $48m in Peru over the next 7 years via its local subsidiary, Perusat, has $640m available to expand in Peru and other countries. In May, ChinaTel entered into a stock purchase agreement with the Isaac Organization, a San Diego-based investment firm with about $5bn in assets under management, which is providing the funding. The stock purchase agreement is priced at $1.50 per share, which would leave the Isaac Organization with 49% ownership in ChinaTel if the entire $640m is drawn. Alvarez says expansion will likely come in the form of joint ventures with companies that hold spectrum licenses. He adds that ChinaTel is in talks with some potential partners, but did not identify them, citing confidentiality agreements. The company is working with an in-house M&A team to identify opportunities. ChinaTel was founded in 2008 through a reverse merger between US-based Mortlock Ventures and Trussnet USA, both Nevada corporations. In March 2009, ChinaTel acquired a 49% stake in Chinacomm for $196m. That same month it acquired 95% of Perusat for about $2.8m and has decided to seek more opportunities in LatAm, particularly in areas where penetration of broadband services is low, Alvarez says. It is also expanding in China, deploying high-speed internet connections in 29 Chinese cities with local peer Chinacomm.