QCOM inside
Wednesday January 5, 12:27 pm Eastern Time
INTERVIEW-Brazil's Vesper starts Amazon phone service
By Shasta Darlington
SAO PAULO, Jan 5 (Reuters) - Brazil's sparsely populated Amazon region is not the kind of place where you
would expect to find the latest in telephone technology.
But that is exactly where Vesper SA, a new telephone company owned by Bell Canada (Toronto:BE.TO - news) and partners, launched
operations on Tuesday, making it the first firm to offer competing fixed-line service in Brazil.
Brazil sold four licenses last year to develop competing fixed-line and long-distance carriers and ensure that its newly privatized phone
system did not just turn into a private monopoly.
The new carriers are known as ``mirrors' since they will compete with the first set of companies to emerge from the break-up of the
national phone company Telebras, which was sold off in regional concessions in July 1998 for $19 billion.
Vesper won bidding in January for a mirror license to compete with Tele Norte Leste in 16 states in coastal and northern Brazil, including
the Amazon region, where it will vie for the huge latent demand for telephones in Latin America's biggest economy.
``We want to grow and a lot,' Vesper's president Gilberto Garbi told Reuters in an interview. ``We have the advantage that our lines are
ready to go - no waiting.'
Vesper, which is also owned by U.S. telecoms firms VeloCom and Qualcomm Inc. (NasdaqNM:QCOM - news), opened its doors in the
Amazon cities Boa Vista and Macapa to test the new system before throwing the switch in big urban centers where residents still wait
months for a new line to be installed.
With $1 billion in investments, Vesper plans to launch operations in 29 cities, including Rio de Janeiro, Belo Horizonte and Salvador, by
Jan. 24 and extend service throughout the region during 2000.
Vesper is betting that despite its higher prices, it will not only win over phone-less residents but current clients of the competition with its
advanced technology and speedy installation and service.
``We plan to give a very different kind of service with modern equipment and high quality lines,' Garbi said.
Residents accustomed to crashing lines, fuzzy connections and busy operators may be tempted by Vesper's fiber optic network and
advanced wireless technology, but prices will be a stumbling block. The installation fee ranges from 257 reais ($140) to 344 reais ($185),
at least five times higher than Tele Norte Leste's fee.
Vesper declined to comment on growth expectations, but analysts said the company will likely corner less than 10 percent of market share
in its first year of operations. Still, high-end customers will help bring in the cash, they said.
Innovations, like a prepaid service aimed at adolescents in upper income homes and the ability to buy a line at Vesper's Web site will also
help set it apart, analysts said. The company also plans to work with Internet providers to offer high-speed access in some areas.
The Bell Canada group also bought the license to serve Sao Paulo state. Vesper Sao Paulo, as the new company is called, will begin
competing with Telesp , owned by Spain's Telefonica , on Jan. 24.
Intelig, the ``mirror' long-distance carrier majority owned by Britain's National Grid (quote from Yahoo! UK & Ireland: NGG.L), also said it will
launch service by Jan. 24. It will compete with MCI WorldCom's (NasdaqNM:WCOM - news) Embratel |
