Antonio Carlos Valente da Silva Vice-President ... - Connect-World
Antonio Carlos Valente da Silva Vice-President ... - Connect-World
Antonio Carlos Valente da Silva Vice-President ... - Connect-World
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
company logo<br />
The Telecommunications Market In Brazil – Past<br />
Present & Future<br />
by <strong>Antonio</strong> <strong>Carlos</strong> <strong>Valente</strong> <strong>da</strong> <strong>Silva</strong> <strong>Vice</strong>-<strong>President</strong> Anatel - National<br />
Telecommunications Agency, Brazil<br />
Article<br />
Abstract Anatel has been a force for renovation of the Brazilian<br />
telecommunications sector since its inception in November of 1997. Under its<br />
auspices the government’s monopoly of telephony was privatized and a process to<br />
create a fully competitive marketplace introduced. Fixed telephony has recently<br />
been totally opened to competition. With few exceptions all services are already<br />
open to competition. As a result Brazil will have 58 million fixed accesses, and an<br />
equal number of mobile accesses, by the end of 2005.<br />
The inauguration of Anatel, on November 5, 1997, and the privatization of the<br />
companies in the Telebrás System, on July 29, 1998, marked the start of a new<br />
period in the Brazilian telecommunications sector.<br />
In 1998, after the privatization, the tender process for choosing new Commutated<br />
Fixed Telephony Service (STFC) providers was initiated. These competitive local<br />
exchange carriers (CLECs), called “mirror companies” in Brazil, in other countries,<br />
were to be licensed to compete with the privatized Telebrás System operating<br />
companies known as the incumbents.<br />
On July 3, 1999, Anatel coordinated the assignment and implementation of<br />
Provider Selection Codes (CSP). This new step, established competition between<br />
all STFC operators for national long distance calls – one of the cornerstones of the<br />
new model. The year 1999 also saw the tender of authorizations for mirror<br />
company operators. The “Mirrors” were conceived to operate fixed telephony in<br />
direct competition to the incumbent STFC concession holders in four regions of<br />
Brazil defined by law in the “General Plan for Concessions.”<br />
In the year 2000, many other significant events followed. The mirror companies<br />
began operations in January, consoli<strong>da</strong>ting the principle of competition in
telephony for intra-regional and international long distance calls. Another auction<br />
was held for authorizations to operate the, so-called, “little mirror companies.”<br />
“Little mirror companies” were licensed to provide fixed telephony services in<br />
areas that were not adequately covered by the mirror companies.<br />
In August 2000, Law no. 9998 was approved to create a Fund for the<br />
Universalization of Telecommunications Services (Fust). The fund began<br />
operations in January 2001. Its purpose is to raise the resources needed to<br />
energetically expand the process of universalizing telecommunications.<br />
In November of 2000, Law no. 10052 was approved, which instituted the Fund for<br />
the Technological Development of Telecommunications (Funttel). Funttel’s<br />
objective is to stimulate the process of technological renewal in an accountable<br />
manner; encouraging the acquisition of skills for human resources; stimulating the<br />
generation of jobs and increasing the competitiveness of the Brazilian<br />
telecommunications industry.<br />
Significant growth took place, in the years 2000 and 2001, in the availability of<br />
fixed and mobile telephones. At the end of 2001, the mark of 47.8 million fixed<br />
accesses installed in the country was attained; 37.4 million of these are already in<br />
service. The density of fixed telephones reached 21.7 accesses for every 100<br />
inhabitants, one of the highest in Latin America. The number of cell phones in<br />
service also grew significantly and now totals 28.7 million users. The subscriber<br />
TV segment registered 3.6 million subscribers in 2001 corresponding to a density<br />
of, roughly, 8 subscribers per 100 homes.<br />
With regard to tariffs and the pricing of services, the results were also significant.<br />
The price of a defined mix of fixed telephone services, or “basket, ” dropped from<br />
US$ 119 in 1990 to approximately US$ 30 by 2001. The reduction in the cost of<br />
the basket was due mainly to the drastic reduction in the cost of obtaining a<br />
telephone line after privatization. The same phenomenon has taken place with the<br />
tariff for acquiring a Mobile Cell Service (SMC) line. In 1990, it cost US$ 22,000<br />
to obtain a cellular line in Brazil; in 2001 it cost, on average, US$ 12. Indeed, in<br />
some states, the cost of acquiring a cellular line has dropped to ZERO.<br />
Right now, we are seeing a veritable revolution in the provision of<br />
telecommunications services in Brazil. Until not long ago, it was unthinkable for<br />
the great majority of the population, to have access to fixed or mobile telephone<br />
services at affor<strong>da</strong>ble prices. To<strong>da</strong>y, every <strong>da</strong>y, advertisements throughout Brazil<br />
offer these services at prices that even many of our lowest income citizens can<br />
afford.<br />
Every citizen of Brazil, to<strong>da</strong>y, can obtain Mobile Cell Services whenever the want,<br />
wherever they want, in virtually any part of the nation’s territory. The
approximately 800,000 users at the end of 1994 have grown to more than 28<br />
million by the end of 2001. In 1994 the service density was 0.5 telephones per 100<br />
inhabitants. To<strong>da</strong>y there are 17 accesses per 100 inhabitants. The price for<br />
acquiring a line fell from 320 dollars at the end of 1994 to twelve dollars to<strong>da</strong>y.<br />
The networks have been digitized and the quality of service has improved<br />
constantly.<br />
Having concluded the initial phase of privatization and regulation of the Brazilian<br />
telecommunications sector, Anatel is now proceeding to cement the cornerstones of<br />
the model – competition and universalization – in place by continuing the process,<br />
now quite advanced, of restructuring and modernizing Brazil’s telecommunications<br />
sector.<br />
Full competition in telecommunications services will only take place after the<br />
termination of the current “duopoly period.” The duopoly period was created<br />
during the privatization process to give the companies that acquired concessions<br />
and authorizations for fixed and mobile telephony, often at great cost, a chance to<br />
consoli<strong>da</strong>te their operations prior to facing full competition. Full competition in the<br />
mobile telephony sector will begin when the new band “D” and “E” Personal<br />
Mobile Service (SMP)operators start to offer their services to the public. SMP, a<br />
successor to the traditional SMC mobile service, operates in the higher, 1.8 GHz,<br />
band of the spectrum, and gives the user another option and greater freedom of<br />
choice. The consoli<strong>da</strong>tion of the competitive process is expected to result in a<br />
significant improvement in the quality of services, greater growth in access<br />
availability and an accentuated reduction in tariffs through a wide range of service<br />
plans that are increasingly tailored to customers’ profiles and needs.<br />
The Brazilian market in fixed telephony (STFC) has been totally open to<br />
competition since January 2002. Any operator interested in providing service in<br />
Brazil, including in the national and international long distance categories, can do<br />
so. In principle, they will be subject only to the limitations resulting from the<br />
administration of scarce resources, such as the radio frequency spectrum and<br />
numbering resources – there is only a limited number of Provider Selection Codes<br />
(CSP) that can be dialed.<br />
Anatel has ceased to restrict the entry of new operators since January 2002; we<br />
expect a wide variety of new service providers will emerge as a result. It is worth<br />
highlighting that the holders of existing concession that have already, by December<br />
2001, met all the obligatory universalization targets set for December 31, 2003, can<br />
request permission to operate in additional STFC fixed service areas. They may<br />
also request licenses for other services, in addition to those provided at present,<br />
thus broadening their range of activities in the Brazilian market.<br />
With the exception of the SMC mobile and STFC fixed services, where new
operators are just beginning to enter, all the other services have already being<br />
opened to full competition. Accordingly, it is expected that Brazil will have<br />
something like 58 million fixed accesses, and an equal number of mobile accesses,<br />
by the end of 2005. The density of Brazilian telephony, measured in terms of the<br />
number of fixed accesses per one hundred inhabitants, will increase from to<strong>da</strong>y’s<br />
21.8 accesses to approximately 32 accesses for every hundred citizens. Brazil will<br />
have a population almost 180 million by that time and they will have more and<br />
better services than at any time in the country’s history. We aim to fully integrate<br />
Brazilian society into the world’s Information Society - a basic condition, for any<br />
society, to succeed in the globalized world.<br />
The fifth anniversary of privatization will be marked in 2003. Great activity is<br />
expected in the market as a result of changes originally envisaged in the Brazilian<br />
telecommunications model. It will finally be possible then to transfer the control<br />
over the concessions of privatized STFC providers. This is expected to lead to a<br />
round of company reorganizations that will change the face of the sector. In the<br />
same timeframe, negotiations will also start for the renewal of the existing<br />
concession contracts for fixed telephony (STFC).<br />
In 2004, a new Universalization Target Plan (PGMU) for the STFC will be<br />
discussed and drawn up. New goals for the universalization of service will be<br />
defined, and interested companies will apply to renew their concession contracts at<br />
that time,<br />
In 2005, the first PGMU plan will be concluded. By then, every locality with one<br />
hundred or more inhabitants is expected to have at least one public telephone, and<br />
those with three hundred inhabitants should have normal fixed telephone service<br />
available at home or at work. By 2005, citizens can expect that a request for fixed<br />
telephone service, any place in the country, be fulfilled within a maximum of one<br />
week.<br />
Anatel, is not just a regulatory body. In addition to regulating, approving and<br />
supervising every aspect of Brazil’s telecommunications services, it also plays a<br />
vital role as the representative of Brazilian society at the table where the decisions<br />
are made regarding the future of telecommunications in Brazil.<br />
To play its role well Anatel needs informed feedback from society. To this end,<br />
citizens need detailed knowledge of events taking place in the sector. The Agency<br />
has spared no effort to provide society with the information it needs by<br />
transparently publicizing all its acts and participations.<br />
Conclusion<br />
Anatel has a well-structured Portal on the Internet; it consults the public on all its<br />
acts. In its relations with the press and organized consumer defense entities, Anatel
has always positioned itself, undeviatingly, in favor of the citizens’ interests.<br />
Citizens are the main watchdogs of the Agency’s actions. Anatel constantly seeks<br />
to publicize and disseminate the new reality of the telecommunications sector. It is<br />
a question of showing Brazilian society that the key advances within the sector are,<br />
first and foremost, gains for society. Anatel’s quest to better inform and serve all<br />
Brazilians is a permanent commitment to the nation.<br />
HomeMagazine Contact UsCareers Tell a FriendSiteMap<br />
©Copyright <strong>World</strong> Info Comms Ltd.