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What we recommend is solution number 2.  The expansion of Telesp, provide value-added telecommunication services to government and private sectors for health services, education, fire service and law enforcement.  The reason why we are recommending solution two is because this is the best case for both company and state.  This solution and strategy aligns with consumer necessities along with company growth.  It will provide for customer needs and services for the consumers as well.  It can make Sao Paula a better and safer place to live.  To add, by aligning Telesp with these services it can make it a one shop stop service provider for all in San Paulo.  To conclude, it will propel Telesp into a competitive mainstream telecommunication service provider company. 

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Our third solution would be to establish a wireless telecommunication branch (cellular) for the company. As seen by the exhibit 52% of household already had cellular phones. This would quick start the company in providing services of wireless service and not pigeon hole them in just land line service. A pro would be again an increase in the customer base. As service goes up, revenue will go up and it will be a generator of profits. As they are established fixed line company it will be comparatively cost effective for them to start a cellular service than new companies. (20% cheaper, as given by the case study). Some cons would be increase cost for building infrastructure and support for the new wireless services. Another con would be to look for professional staff to sustain this new service. Resources and supply could be limited. Last, cost is always a con when establishing something new.

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Our second solution would be to expand Telesp to provide value-added telecommunication services to government and private sectors for health services, education, and fire service and law enforcement.  This would give the company a strong foothold in the state and also provide the people of San Paulo with new services.  Some pros would be new customer base, provide a utility for the people, and establish Telesp as a strong and safe brand.  It would be a revenue generator if it became a one shop stop for all telecommunication services.  One more pro for Telesp is having a barrier of entry to other companies if it establishes these ties.  Cons would be that cost can be very high in the beginning and may continue for awhile.  Short term profits will be down also because of all the cost that will occur to set up the infrastructure with the expansion.  Some management issues could come from going into many of these new sectors of service.  Another con which will surely arise is the politics dealing with the government.  Furthermore, increased completion from other companies in Sao Paulo could also come into play because of their entry. 

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First solution will be to acquire or have a joint venture with another company that already has an infrastructure established. Go slowly by expanding in some nearby regions and then take it from there. This would help the company to increase their customer base. It would also be cost effective as they will not have to build an infrastructure. It would help them provide value added services to what is offered now. Cons are that they will have lower profit margins as it will be shared. There will be some roadblocks presented by the incumbent providers. They will have to deal with political issues with their sudden entry into the market.

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Since then, they’ve been expanding their broadband offerings and pay TV services, since the wireline market has become stagnant  It also partnered with Grupo Abril, a major media company in Sao Paulo, to its product offerings.  They currently face strong competition in the wireless segment due to Embratel’s dominant market position and face a huge threat in an imminent merge between the two other wireline operators, Brasil Telecom and Telemar.

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