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- Telecommunications:
- Legislation:
The most important legal piece is Law nr. 9473, July 17th 1997, known as the Telecommunications Act.
- History:
Until 1998, all the telecommunication services in Brazil were made available by State owned companies; on 1998, all the companies were sold, in the biggest privatization
auction to ever happen in Brazil.
All the long distance and international calls were operated by Embratel; Embratel was bought by US based MCI and continued operating under the same name. Telebrás was the
national holding for several local phone companies, one in each state; so, TELESP operated in the State of São Paulo, TELERJ in Rio de Janeiro, TELEMIG in Minas Gerais and so
on.
The mobile phones were also operated by the Telebras subsidiaries; each of the Teles had a department dedicated to operating cellular phones. All the companies were clearly
uncapable of meeting the consumer's demands.
Buying a phone line was a nightmare to consumers. The phone companies, based on their expansion plannings, decided when, and how many, new lines would be available for sale.
To buy one of the lines, consumers had to become share holders of the company: each line was considered property of the company, and each line owner was also owner of shares
of the company; this is how the companies found capitals for their expansions. These shares were paid for in advance, but the actual delivery of the line was at an unknown
date; it was not uncommon to wait for a few years before a line was installed. As a consequence, there was a black market of telephone lines in Brazil.
To buy a mobile line, candidates had to be lucky enough to win a draw; the process was: go to the phone company office (run by civil servants), queue up, fill forms, wait for
the drawings (lottery numbers), and, if lucky, go back to the office, bring your own cellular, fill more forms, queue up again to pay the invoices, and you're free to try to
use your (often busy) cell phone.
Besides technical issues, the phone companies were also subject to bad political influences. The board of directors was defined by the federal government, and it was not a
secret that these positions were subject of political negotiations. Directors had no compromises with profits, performance, standards, etc; while they were allies, they would
keep their jobs.
The cost of calls was controlled by the government. To keep inflation down, prices were kept artificially low (causing financial losses to companies, and, by extension,
losses in the investment capacity).
There was not an independent agency to regulate telecommunications. All policy was defined by the Ministry of Communications or, even worse, by the policy executors
themselves (Telebrás, Embratel, etc). Right before the privatization, Anatel - National Agency of Telecommunications, an agency similar to FDDC, was created.
- Privatization:
The telecommunication companies were privatized in 1998. The privatization had to be preceeded by a Constitutional Ammendment, in the first year of the government
of President Fernando Henrique Cardoso; this ammendment came to allow private corporations to run telecom businesses in Brazil. In 1997, Congress approved law nr. 9472,
the Telecommunications General Act. Among other mesures, the law established guidelines for the privatization of the sector.
The privatization auction happened on July 29th 1998. The companies were divided and sold in batches. The local calls phone companies were split in three geographical zones:
I) the State of São Paulo;
II) States of North, NorthEast and SouthEast;
III) States of South and Central West. Embratel, the then monopolistic long distance carrier, was sold alone. The mobile companies were divided in eight geographical
zones. According to the government, the auction was a financial success. Between fresh cash and debt transfers, the Treasury collected over US$20 billion, with an
overprice of about 63%, compared to the minimum bids.
- The situation today:
Today, all the telecommunication companies are private. The Ministry of Communications is responsible by strategic, long term planning, while Anatel - Agencia Nacional de
Telecomunicacoes - is responsible for regulatory functions (similar to American FDDC).
As of January 2004, there were 42,317,263 private and 1,317,498 public terminals in Brazil, as informed by Anatel.
Anatel doesn't seem to keep updated info on the number of mobile phones, but this site does. For comparison purposes, as of Jan. 2004, there were 46.955.244 mobiles in Brazil.
After the privatization in 1998 (see link above), the country was divided in geographic regions, and each region had one local operator (Embratel was the only long distance
carrier). Today, there are at least two operators in every State; below, a brief description of the operators:
Embratel: long distance and international calls carrier
Intelig: long distance and international calls carrier
Telefônica: subsidiary of Spanish holding Telefonica: Originally, was authorized to operate within the State of São Paulo only, but nowadays is also operating long distance
and international calls.
Brasil Telecom: Operates local calls and calls between the States of North, South and West Central: Acre, Distrito Federal, Goias, Mato Grosso, Mato Grosso do Sul, Paran,
Rondônia, Rio Grande do Sul, Santa Catarina and Tocantins.
Telemar: After the privatization, Telemar was authorized to operate in States of Northeast and Southeast; today, it operates also long distance and international calls.
Telemar is one of the biggest private Brazilian corporations; it's the company with the highest weight in the Brazilian stock index.
Vésper: Meant to be a competitor of Telemar and Telefonica; however, the technology employed (based on radio, instead of cables) was not successful.
The following companies are smaller in size and operate in restrict areas:
CTBC Telecom: Operates mostly in cities of Minas Gerais, São Paulo and Rio; carries voice and data.
GVT (Global Village Telecom): operates in the same area as Brasil Telecom
Sercomtel: Operates in some cities in the State of Paraná
- Mobile Phone:
For chartering of mobile phone services, the country was also divided in geographic zones. Besides, the spectrum of frequencies was also divided in several bands.
Each State has at least two, and some have up to four mobile operators (some of the non-mobile phone operators have been allowed to operate mobile service).
Click here to see the zones and bands of the mobile phone services in Brazil.
Click hereAnd click the link for a list of mobile phone operators in Brazil.
- Price comparison:
Maximum prices are controlled by Anatel, following legal and contractual dispositions. However, competition has obliged operators to offer discounts, based on volume,
pre-paid packages or other criteria. Anatel periodically publishes the maximum allowed prices.
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