Brazil's Embratel, Telefonica Prepare For Deregulation
Dow Jones Online News, 06/07/2001 14:59
SAO PAULO -(Dow Jones)- Brazilian long-distance carrier Embratel Participacoes SA (EMT) and Telefonica SA's (TEF) local unit Thursday are preparing for an upcoming deregulation of the telecoms sector.
Regulator Anatel plans to allow companies to offer new types of services in 2002 - a year ahead of schedule - provided certain performance targets are met.
Embratel Thursday said it has asked local telecom regulator Anatel for permission to offer local phone services beginning in 2002, after it meets its performance targets. Initially, Embratel said it plans to offer local services mainly to corporations and governments.
And Telefonica's unit Telecomunicacoes de Sao Paulo SA (TSP) said Thursday it intends to unbundle its local fixed-line system and offer network access to competitors starting in 2002.
Deregulation is expected to turn Telefonica into a competitor of Embratel in the international long-distance market, and force Telefonica to share its network with upstart service providers.
Meanwhile, Embratel, a unit of Worlcom Inc. (WCOM), denied talk it plans to run local phone services over infrastructure owned by U.S. power giant AES Corp. (AES). AES wasn't immediately available for comment.
AES has been busy laying broadband telecommunications networks along the power lines of three Brazilian electricity companies where it has stakes, in the states of Minas Gerais, Sao Paulo and Rio de Janeiro. Embratel said it plans to offer local services in these areas.
Outside of these southeastern states, Embratel plans to offer the service in six major state capitals in 2002, but hasn't said how it will offer service in areas where AES doesn't have operations.
In the first quarter, analysts expected Embratel to compete for three wireless network operating licenses that would have allowed the company to establish nationwide mobile phone coverage.
But Embratel didn't bid for the licenses. The licenses went unsold and are expected to be re-offered in August.
-By Terry Wade, Dow Jones Newswires; 5511-3813-1988; terry.wade@dowjones.com
(This story was originally published by Dow Jones Newswires)
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