Competition seen ignited in Brazil 2002 local phone market
Sunday November 18, 1:48 PM EST
SAO PAULO, Brazil, Nov 18 (Reuters) - Brazil's local phone market will be the new battleground for operators after deregulation in 2002, the president of the National Telecommunications Agency (Anatel) said in an interview published on Sunday.
Since July 1998, when Brazil privatized its Telebras phone system, the number of fixed lines has more than doubled to 47 million, and the black market for phone lines, which thrived on Telebras' ineffectiveness, has become all but extinct.
"It is undeniable telecommunications in Brazil have changed in the last years," Anatel President Renato Navarro Guerreiro told the Sao Paulo daily O Estado de S.Paulo.
But Guerreiro wants more.
In January, operators that have met an array of Anatel requirements, including universal coverage, will be allowed to expand beyond their current concessions to enter new markets throughout Brazil.
The hope is that consumers will benefit from lower prices brought on by competition.
"The responsibility for universal coverage is in the concessionary contracts. There are companies that have already fulfilled their obligations projected for 2003 because this opens the market for them from the start of 2002," he told the Estado.
National long-distance carrier Embratel (EMPT4) (EMT), owned by MCI/WorldCom (MCIT), and Sao Paulo state's fixed-line operator Telesp (TLPP4), owned Spain's Telefonica (TEF),have met their goals.
They will now be looking to expand their client base in Brazil largest metropolitan centers like Sao Paulo and Rio de Janeiro.
"There will always be a clearer perception of a dispute over clients in major centers. The companies will not enter Brazil's countryside," Guerreiro said.
Despite Anatel's attempt to create competition on the fixed-line market through "mirror companies" such as Vesper, owned by Qualcomm (QCOM), the program has met with limited success.
For Guerreiro, Vesper never provided consumers a viable alternative but he is optimistic that the next phase of deregulation will ignite competition on the local level.
"When the market opens to competition it is possible we will have four companies competing in the large cities," he said, adding that prices will also fall in smaller cities.
The Brazilian-owned fixed-line Telemar (TMAR5) (TNLP4), with a concession area spanning 16 states, is still struggling to meet its goals by Dec. 31.
And fixed operator Brasil Telecom (TCSP4), owned by Telecom Italia and a consortium of local investors, has said that it would not meet its goals until Dec 31, 2002.
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