Brazil's CTBC-Telecom emerges as cellular novelty
Reuters, Monday, March 23, 1998 at 16:26
By James Craig
SAO PAULO, March 23 (Reuters) - In a country of monster
waiting lists for cellular lines, where only the privileged
know the joys of owning a mobile phone, Brazil's small
CTBC-Telecom is something of a novelty.
"We don't have a back-log or pent-up demand, so we have to
go out and look for new markets," said Lauro Martins, head of
the company's cellular business.
This month, CTBC-Telecom began a new program of offering
the young and the poor in their operating area in central and
southeastern Brazil cellular services via a new pre-paid
program.
"We are the first company in Brazil to do this and are now
beginning to serve low-income and poor populations," Martins
told Reuters in an interview.
Privately held CTBC-Telecom, which now has 100,000 mobile
phone subscribers in parts of Goias, Minas Gerais and Sao Paulo
states, expects to boost that by 40 percent by year's end. More
than half the growth should come from its pre-paid program.
"We should have 25,000 pre-paid customers by the end of
1998," Martins said.
In the first 10 days, 1,200 new customers signed up for the
service but the rate of new subscribers should ease as the
novelty wears off, he said.
"So far its been great, but probably in two or three months
we'll see a reduction (in the rate)," he added.
The program works like this: a customer buys cards for as
little as 25 reais ($22) with credits, has CTBC activate his or
her cellular handset and then make calls until the credits run
out. When that happens, a subscriber must buy more cards to
continue using the mobile phone.
While it is designed to benefit most those who do not use
mobile phones extensively, the program at least grants
Brazilians who otherwise would not have access to mobile
telecommunications, he said.
CTBC's reality contrasts with that of federal Telebras
(SAO:TEL_.P) system, which serves the overwhelming majority of
Brazilians.
The comparison is starkest with its subsidiaries covering
Brazil's largest cities, where the waiting lists of potential
cellular phone subscribers run into the millions and pent-up
demand can take years to meet.
For instance, Telesp Celular, the mobile phone operator
spun off from Telebras' Telesp (SAO:TLS_.P), now operates some
1.1 million cellular lines but has a waiting list of more than
2.5 million potential customers
The advent of private sector competition should take
pressure off Telebras to fill back orders but experts estimate
Brazil's massive pent-up demand could take years to satisfy.
As a result, a host of major telecommunications operators
from around the world are lining up to take part in the sectors
privatization.
The government plans by mid-year to sell off Telebras in
Latin America's largest privatization ever and to offer
competing wireline and cellular concessions across Brazil as
part of its massive selloff of the sector.
Copyright 1998, Reuters News Service |
