Brasilcel- Tender Offers

Telefonica SA
25 August 2004

Press Release

25/08/2004


BRASILCEL ANNOUNCES ITS INTENTION TO LAUNCH VOLUNTARY TENDER OFFERS FOR
TELESUDESTE, TELE LESTE, CRT AND TCO


Madrid, August (255), 2004.- Brasilcel, the 50-50 joint-venture of Telefonica
Moviles and Portugal Telecom for mobile operations in Brazil, operating under
the brand Vivo, announces its intention of launching voluntary cash tender
offers for a portion of the outstanding shares of some of its subsidiaries,
directly, and indirectly through its subsidiary Telesp Celular Participacoes
(TCP).

With these transactions, Telefonica Moviles and Portugal Telecom affirm and seek
to reinforce their commitment to the Brazilian cellular market and to Vivo, and
Brasilcel seeks to increase its ownership interest in its subsidiaries. In
addition, these offers will provide an opportunity to remunerate those minority
shareholders tendering their shares at a premium to market prices.

The Proposed Tender Offers

Brasilcel intends to launch voluntary cash tender offers for the following
securities of its subsidiaries:

  • Tele Sudeste Celular Participacoes (TSD): up to 7,332 million Common
    shares (ON) and 12,700 million Preferred shares (PN).

  • Tele Leste Celular Participacoes (TBE): up to 16,723 million ON and 92,499
    million PN shares.

  • Celular CRT Participacoes (CRT): up to 61 million ON and 442 million PN
    shares.

Simultaneously, TCP intends to launch a voluntary cash tender offer for up to
84,253 million PN shares of Tele Centro Oeste Celular Participacoes (TCO).

The number of shares that Brasilcel and TCP will be offering to acquire has been
determined to allow Brasilcel and TCP to increase their participation in the
subject companies without suppressing the liquidity of the remaining shares of
those classes for purposes of Brazilian Comissao de Valores Mobiliarios (CVM)
regulations (specifically Instruction 361).


The offer prices will be:

                       Price per 1,000 shares (R$)

                         ON               PN

TSD                    6.35             7.80

TBE                    0.90             1.10

CRT                  575.31           718.69

TCO                   -----            10.70

These offer prices represent a premium of 20% over the respective weighted
average closing price of each class of shares in the last 30 trading days prior
to announcement.

Telefonica Moviles and Portugal Telecom intend to provide funding to Brasilcel
for the tender offers on a 50-50 basis. TCP intends to fund its tender offer
with debt and, taking into account the outcome of the tender offer, amongst
other factors, will evaluate a potential capital increase, if it considers a
reduction of its level of indebtedness to be advisable.

The Rationale

Increase Brasilcel's ownership of its subsidiaries

Telefonica Moviles and Portugal Telecom have increased their ownership in the
Vivo subsidiaries since their initial acquisition, and these offers will further
increase their economic interest, while allowing continuing liquidity in the
equity capital markets for those shares.

Opportunity for minority shareholders to realize gains

These offers provide the minority shareholders with the opportunity of selling
their shares at a premium over market prices and to realize gains.

Reinforces Telefonica Moviles and Portugal Telecom's commitment to the Brazilian
cellular market and to Vivo

Telefonica Moviles and Portugal Telecom continue to believe the Brazilian
cellular market, with 160 million inhabitants and relatively low cellular
penetration, continues to offer substantial growth potential. The proposed
transaction strengthens Vivo's position in the Brazilian market and enhances its
participation in the potential growth of its subsidiaries.

The Impact on Ownership

The table below illustrates the impact on the ownership of Brasilcel and TCP of
its subsidiaries, assuming 100% acceptance levels:

Brasilcel              Current Ownership            Pro-forma Ownership
                                                (assuming 100% acceptances)

                   ON       PN       Total          ON       PN       Total

TSD              88.5%    85.4%       86.7%       92.3%    90.3%       91.1%

TBE              58.7%    11.4%       27.9%       68.7%    40.9%       50.6% 

CRT              86.6%    26.3%       51.5%       91.0%    49.7%       67.0%



TCP                   Current Ownership               Pro-forma Ownership
                                                  (assuming 100% acceptances)

                   ON       PN       Total          ON       PN       Total

TCO              86.2%     0.0%       28.9%       86.2%    32.8%       50.6%


The Expected Timing

The offers are expected to begin in the first week of September and will be open
for at least 30 days from the date of the publication and filing of the formal
documentation. The offers are expected to be completed by mid-October.

The tender offers will be subject to certain terms and conditions that will be
included in the formal offer documentation.

This document does not constitute an offer to purchase or a solicitation of an
offer to sell securities of CRT, TBE, TSD or TCO (the 'Companies'). At the time
the tender offers are commenced, Brasilcel and TCP will file tender offer
statements on Schedule TO with the U.S. Securities and Exchange Commission
('SEC') with respect to their offers to purchase common shares and preferred
shares of TBE and TSD and preferred shares of TCO, respectively, and will file
translations of these documents with the Brazilian Comissao de Valores
Mobiliarios ('CVM'). Shareholders of the Companies are strongly advised to read
the Brazilian Edital and other relevant documents published by Brasilcel or
filed with the CVM, and, in the case of shareholders of TBE, TSD and TCO, the
tender offer statements and other relevant documents filed with the SEC, when
they become available because they will contain important information. All these
documents will be published or filed at the appropriate time in accordance with
applicable Brazilian and U.S. regulations. TBE, TSD and TCO shareholders will
have access to the U.S. documents, when they become available, free of charge at
the SEC's web site, www. sec.gov. In addition, shareholders of the Companies
will have access to all these documents free of charge from Brasilcel or in the
locations indicated by applicable Brazilian and U.S. law.


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