BellSouth and Verizon signaled yesterday that their Latin American operations were preparing to default on hundreds of millions of dollars of debt because of economic problems in Brazil and Argentina.

BellSouth's subsidiary, BCP, missed a $375 million debt payment yesterday ... and has been unable to reach a definitive solution for BCP's debt situation ...

... currency devaluation and economic slowdown are at the heart of BellSouth's problems ... revenue is almost entirely in local currency, while its debt is mostly in dollars.

The default by the BellSouth unit would be one of the largest by a subsidiary of an American company in Brazil ... BellSouth may need to take a charge against earnings because of its unit's difficulties in Brazil.

Enron and Qwest struck a $500M deal last fall to swap fiber optic network capacity and services at exaggerated prices in an effort to improve each company's financial picture. ... analysts said the timing and the valuation would be hard to justify ...

Qwest, the dominant telephone company in 14 Western states, has said publicly that its swaps are based solely on the needs of its network operations. ...

"Qwest said we will overpay for the assets, and you will overpay me on the contract," one former Enron executive said. "They had a pinch in the third quarter and needed a deal."

"It's totally irrational [for Qwest] to buy capacity from Enron. This is clearly a swap for accounting purposes."

On Sept. 30, a Sunday and the final day of the third quarter, Qwest signed a deal to pay Enron $308 million for assets that included so-called dark fiber along a route from Salt Lake City to New Orleans. In exchange, Enron agreed to pay Qwest $195.5 million for "lit wavelength" over a 25-year period; each company exchanged checks for about $112 million around the close of the deal.

"I can't conceive of any reason [Qwest] would need more dark fiber in the U.S.," said one analyst.

Nextel Communications Inc., the No. 5 U.S. wireless operator, took a charge of roughly $1.6 billion in the fourth quarter of 2001 to restructure NII Holdings Inc., its troubled international unit.

Verizon Communications, the nation's largest local telecommunications company, is beginning a big brand image campaign that asserts it helps its customers "make progress every day."

... when the telecommunications industry is suffering disruptions ... Verizon is hoping to associate its brand with a positive, uplifting message ...

XO Communications Inc., a money-losing telecommunications company, said on Friday it is considering a $500 million bid by financier Carl Icahn for 50 percent of the company, and that it may file for bankruptcy protection "in the very near future." ...

Ericsson's CEO said Wednesday he saw no signs of a turnaround in the company's business this year, and shares of the cell phone and telecom gear maker fell in early trading.

"We see no signs that the market has turned. The point of departure in our planning is that it will not turn this year. ... The market is cold. There is no significant increase in orders." Ericsson's orders fell 16 percent last year from 2000 and 39 percent in the fourth quarter alone.

A lawsuit quietly moving forward against the telecommunications giant WorldCom accuses the company of using concealed transactions and sham contracts to avoid reporting an uncollectible debt of $165 million. ...

A creditor's effort to evict Global Crossing Ltd. from a New York site where a fiber-optic cable from England hooks into the network of U.S. land lines would wipe out a third of Global's transatlantic telephone traffic and slash the company's value to potential buyers. ... [The motion] shows the precariousness of Global's vaunted worldwide network and the dependence all telecommunications companies have on each other, especially at a time when financial troubles seem to be having a domino effect. ...