Brazil Phone Price War Over, Embratel Raises Rates
Dow Jones Online News, 09/08/2001 11:09
RIO DE JANEIRO AP)--Brazilians enthusiastic about a promotion of super-low phone rates will have to rein in their calls abroad again as the country's biggest long-distance telecoms provider, Embratel, steeply raised prices again.
In a small print statement in the economics section of local newspapers the company on Saturday announced a new "promotional" pre-tax rate of 0.87 reals ($1=BRR2.584) a minute to the U.S. and BRR1.50 to many European Union countries, such as the U.K. or Germany, and Japan.
The new rates valid from Sept. 10 on bury a short-lived price war in August and early September with the only other international calls provider, Intelig, during which Embratel had slashed rates to BRR0.07 a minute to all of those countries and Intelig to BRR0.06 a minute.
If customers don't want to join a special program signing up to only use Embratel for calls abroad, rates are even higher. They already now reach BRR1.81 a minute to E.U. countries, for which the earlier bargain-basement rate has already ended Sept. 2. Intelig charges BRR1.75 to those countries.
"High international phone rates harm Brazilian businesses," said Pedro Villani, a telecoms analyst at ABN Amro Asset Management in Sao Paulo.
On top, customers in most Brazilian states have to pay about 40% tax on the long-distance calls.
When the August price war started, phone companies had said the basement rates were part of a strategy to fight "illegal competition" from services that channel phone calls through the U.S. telecommunications system and charge Brazilian customers U.S. phone rates, which so far have been considerably lower than Brazilian rates.
Brazil's telecommunication regulator, Anatel, said it will open Brazil's overseas long-distance phone market to more competitors next year.
"With the opening of the market, we expect a lasting, strong fall in rates," Villani said.
(This story was originally published by Dow Jones Newswires)
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