Brazil to sell PCS licenses for three areas
(UPDATE: adds analyst comment in paras 5-6, auction rules paras 7-9)
SAO PAULO, July 10 (Reuters) - Brazil's telecommunications regulator said on Monday it
plans to sell new cellular licenses in three regions, an auction that industry analysts say could
start the ball rolling to bring in $5 billion in fresh investment.
Anatel, Brazil's National Telecommunications Agency, picked out the regions of the
northeast, the central-south and the industrial powerhouse of the state of Sao Paulo to sell PCS (Personal Communications
Services) licenses.
``We decided to make the same divisions as we made for fixed telephone services...since the convergence of
telecommunications networks is imminent,'' said Renato Guerreiro, Anatel's president, during a news conference.
The licenses will allow telephone companies to offer the latest technology in cellular communication, including high-speed
Internet access. They'll operate at a bandwidth widely used in Europe -- 1.8 GHz -- and are expected to attract fresh
European and U.S. investors.
The agency plans to sell one license for each region this year and two more licenses for each region in 2001. The nine licenses
and the auction's game rules will bring in a host of new competitors and lead to companies merging their local, long-distance,
wired and cellular operations, analysts said.
``This is going to allow for a lot of competition and opens the way for companies to consolidate all their businesses,'' said
Mirela Rappaport, a telecommunications analyst at ABN Amro in Sao Paulo.
POTENTIAL PLAYERS
Industry analysts say a third of all cellular phones in Brazil could be operating through PCS by 2005, bringing in $5 billion in
investment over the next five years.
According to Anatel's rules, companies that buy PCS licenses will have the right to offer national and international long-distance
services as well as local cellular calls. That means new competitors for long-distance companies like Embratel , which in turn
will be able to bid for PCS licenses in 2001.
The rules, however, ban fixed-line companies from bidding in the first round of the auction this year. That excludes the likes of
Telesp , Spain's Telefonica or Brasil Telecom from participating until the 2001 auction.
Companies can't bid for PCS licenses in regions where they already operate, unless they sell their existing concessions.
Anatel, however, bets the public will be the main beneficiary.
``The user is going to have more options. That means better quality and lower rates because of more competition,'' Guerreiro
said.
The first group of PCS operators should be up and running by July 2001, while the second group should be operational by
2002, Anatel said.
Industry analysts expect the licenses to entice bids from existing operators like Telefonica, Portugal Telecom or Telecom Italia
as well as attract new players that are familiar with the 1.8 GHz standard, like Vodafone AirTouch Plc (quote from Yahoo! UK &
Ireland: VOD.L), British Telecommunications Plc (quote from Yahoo! UK & Ireland: BT.L) and Deutsche Telekom AG . |
