Exhibit 4.2
CELLULAR SERVICE AUTHORIZATION CONTRACT
(Summary)
Cellular Service Authorization Agreement entered into and between the Brazilian
government, through ANATEL, and Tele Centro Oeste/Inepar Ltda., (currently NBT)
on November 27, 1998.
SCOPE
The contract authorizes NBT to exclusively use certain sub-band cellular
frequencies from 835.0 to 845.0 MHz and certain associated radio frequencies
from 880.0 to 890.0 MHz and 891.5 to 894.0 Mhz for transmission in Area 8.
The authorization to operate the cellular services is for an indefinite term,
subject to certain conditions. However, the authorization to use the radio
frequency is limited to 15 years and may be renewed once for another 15 years.
CONSIDERATION
NBT agreed to pay R$60.5 million to ANATEL for the right to explore the cellular
service and to use the associated radio frequency as follows:
o R$24.2 million on the date of the signature of the authorization term,
equivalent to 40% of the total amount;
o R$12.1 million on November 27, 1999, equivalent to 20% of the total
amount;
o R$12.1 million on November 27, 2000, equivalent to 20% of the total
amount;
o R$12.1 million on November 27, 2001, equivalent to 20% of the total
amount.
These amounts are adjusted by 1% per month in accordance with the IGP-DI.
MAIN CONDITIONS OF THE CONTRACT
The operation of the service is the responsibility and risk of NBT. NBT's
remuneration is based on customers' payments, and the service will be performed
in conformity to ANATEL Public Tender Proposal ("Proposal") and will observe the
conditions of the Methodology of Execution, and the elements of the Price
Proposal for the right to use the service and the associated radio frequencies,
which is established in Annexes 1, 2 and 3 of the contract. Third parties can be
contracted by the authorized, without prejudice of the liabilities related to
the services, even if caused by third parties. In addition, all fiscal
regulations must be respected. The installation and operation of the service are
subject to ANATEL quality control guidelines.
SERVICE RATES AND PRICES
Service prices are subject to the price cap presented in the Proposal. There is
a differentiation between "basic" and "non-essential" services. "Basic" services
include monthly subscription fees, VC1 charges, VC2 charges, VC3 charges, DSL1
charges, DSL2 charges, and AD charges, as well as interconnection charges,
including network usage fees and charges to provide a physical connection to the
network. "Non-essential" services are optional and can vary in price according
to technical and geographic characteristics. SEE ITEM 4 " INFORMATION ON THE
COMPANY - REGULATION OF THE TELECOMMUNICATIONS INDUSTRY - RATE REGULATION."
ANATEL RIGHTS, GUARANTEES AND OBLIGATIONS
In general, ANATEL is responsible for: the general supervision of the
performance of the Cellular Mobile Service; the legal and normative application
of penalties, including those referred in the authorization term; the
termination of the authorization, in the manner and circumstances prescribed by
law; the execution of the norms defined in the service, including the
interconnection with the public network; the guarantee of quality of service;
the assurance of competition; and the declaration of public utility of certain
services when necessary.
NBT RIGHTS, GUARANTEES AND OBLIGATIONS
In general, NBT is responsible for: the assurance of an available and
commercially operational Mobile Cellular Service in accordance with the
authorization, the performance of services at prices in conformity with the
agreement and the Proposal; providing information about implementation,
improvements or expansion of the service, being emphasized that ANATEL will keep
this information confidential; the use of certified equipment, the allowance of
access to documents and places related to the authorization; the maintenance of
the integrity of the assets of the service; the continuance of an updated
inventory and register of patrimony used in the operation of the service; the
maintenance of adequate customer care; the annual publication of the company
financial demonstratives; and the promotion of the balance of the economic
financial condition of the authorization.
CUSTOMER RIGHTS AND OBLIGATIONS
NBT, besides observing the general legal dispositions related to customers'
rights, has to respect customers' rights to receive adequate service, legal and
contractual information (including from ANATEL), and also the right to have
freedom of choice related to the use of the service.
Customers, in order to receive the service, are asked to keep in good condition
equipment relating to the security of third parties; and to timely effect
payment of charges and taxes due.
INTERVENTION
Anatel can intervene in the authorization in order to keep the proper
performance of the service in conformity with applicable legislation, when the
authorization clauses or applicable regulation are not complied with. When such
intervention, is no longer warranted, the administration of the service will
revert back to NBT. If the intervention does not comply with legal and
regulatory requirements, such intervention will be declared null and void, with
the immediate devolution of the service to NBT.
TERMINATION OF THE AUTHORIZATION
The authorization may be terminated either by Anatel or by resignation of NBT.
Total or partial non-performance of the terms and conditions of the
authorization may result in regulatory, intervention and, ultimately,
termination of the authorization by Anatel. Where termination by Anatel is due
to non-compliance with regulatory or legal dispositions, administrative
procedures and due process of law shall be observed.
PENALTIES
If in default, NBT will be subject to penalties, which may include fines up to
0.05% of NBT's net revenue.
ASSIGNMENT
Either the authorization or NBT's rights and interests may be transferred, after
60 months from the beginning of the commercial operation of the service, subject
to ANATEL approval, and after the payment of a fiscalization tax.
RENEWAL
The authorization for the use of the radio frequencies may be renewed for
another 15 years, at NBT's discretion, provided it complies with all terms and
conditions of the authorization and requests renewal 20 months prior to
expiration of the first term. Renewal will be subject to a new payment schedule
for the use of the radio frequencies, to be set by Anatel at the time.
