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From Reuters (Tais Fuoco)

* Q4 net income jumps to 215.5 mln reais vs 26.2 mln

* 2008 profit 389.7 million reais vs loss 99.8 mln

* Sees Brazil’s wireless market continuing to expand

* Seen “a small growth” in January

Brazil’s largest mobile phone company Vivo Participacoes (VIVO4.SA)(VIV.N) said on Friday its fourth-quarter profit surged nearly ten-fold because of a sharp increase in new users and as it kept costs in check.

The company’s chief executive Roberto Lima said the profit surge in the fourth quarter was due to changes in its subscriber and pre-paid telephony offers and “very rigorous” cost controls, as it renegotiated contracts with suppliers.

Vivo, a joint venture of Portugal Telecom (PTC.LS) and Spain’s Telefonica (TEF.MC), said net income rose to 215.5 million reais ($94.1 million) from 26.2 million reais in the fourth-quarter of 2007.

For all of 2008, Vivo made a profit of 389.7 million reais, the best year since the company was formed in 2003, compared with losses of 99.8 million reais in 2007.

“Vivo had a few illnesses in its infancy but today it’s growth is healthy,” Lima said in an interview with Reuters.

Vivo added 2.668 million new mobile phone users in the fourth-quarter, bringing its total user base at the end of 2008 to 44.95 million people.

The jump in new wireless clients helped boost sales by 14 percent to 4.27 billion reais in the fourth quarter, Vivo said. Sales for all of 2008 totalled 15.8 billion reais.

Lima said the company’s growth could slow in 2009 but he believed Brazil’s wireless market would continue to expand.

“This is a sector that has been growing in the double digits since its creation. Even if it grows 10 percent, it’s still a fantastic rate,” he said, pointing out that any growth achieved was on the basis of an already large customer base.

He said the company had seen “a small growth” in January this year over the first month of 2008.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 43 percent to 1.39 billion reais from 978.9 million in the final quarter of 2007.

EBITDA as a percentage of sales, a measure of profitability widely followed by analysts, jumped 6.6 percentage points to 32.7 percent in the fourth-quarter.

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