WorldCom is our controlling shareholder with 51.79% of the voting shares of Embratel Participações and a 19.26% economic interest as of December 31, 2000. See "Item 7. Major Shareholders and Related Party Transactions - A. Major Shareholders". WorldCom views our company as an extension of their local-to-global-to-local strategy.

Our principal subsidiaries are Star One S.A. and AcessoNet Ltda. Star One was formed in November 2000. We currently own 80% of Star One's share capital and the remainder is held by Société Européene des Satellites S.A. (SES ASTRA). Star One is our satellite subsidiary and currently owns four C-band satellites and provides transponder rentals, radio and TV signal transmission and trunking communications transmission. It has landing rights for the United States, Chile, and Peru and is obtaining rights for Argentina, Uruguay and Paraguay. Star One is expanding its scope to offer broadband services in Brazil and South America.

On December 27, 2000, Embratel acquired 100% of AcessoNet Ltda. for R$195.8 million through a holding company called Keshara Empreendimentos, Ltda. AcessoNet is the underlying Internet network provider of Universo OnLine, or UOL, the largest ISP in Brazil. AcessoNet has a 66,000 port dial-up network and a five year renewable services contract with UOL.