|Latin America III 1998
|Real Opportunities for Technology and Competitiveness
|Jose Humberto Resende de Miranda
With the privatisation of Telebras, the world can now take advantage of the opportunities that Brazil offers to new investors with the auction of various state-run companies. Alliances between national and international companies are already taking place, in preparation for the competitive environment. In tune with the progress of globalisation, competitiveness and technological innovation, Engeset has been developing strategic alliances, for success will only happen to the most competitive of companies.
An overview of the last few years is sufficient to understand the major changes that Brazil is presently going through on its way to true global integration. In Brazil today the concept of a “New Society” is growing stronger than ever and is completely integrated in the world of information, knowledge, communication and technology. The country is also speedily being integrated in the knowledge and communication revolution, intelligently opening up the way to the development of competitiveness and participating in a revolutionary process of increased productivity. Focusing on the telecommunications sector, a series of factors emerge as priority: · less than 10% of the population has a telephone; · there is growing restricted demand for services (uncertainty about new market developments); · low quality of services; · access to communications is expensive (only subscribers invest); · tariffs are based on basic cost and expected profits; · efficiency and agility is low; · interference and party politics in the operators; · it is a monopoly culture; and, · the consequences of the deregulation of the telecommunications sector and the dismantling of the monopoly. Technology and Competition Beginning with the privatisation of Telebras, the world can now take advantage of the special opportunities that Brazil offers to new investors with the auction of various state-run companies. In fact a new competitive environment is being created where the first to benefit from privatisation will be the consumers. Second to benefit will be private enterprise, particularly those whose investments were based on open competition, fair and attractive pricing, and have a high quality of customer service and care. The doors of multiple competition, as far as telecommunications and the national infrastructure are concerned, will be the responsibility of ANATEL (Brazil’s National Telecommunications Regulatory Authority). ANATEL will impose a new dynamism to upgrade technology, since without strategic investment, remaining competitive and maintaining the present market share exclusively to the incumbent operators would be impossible. The majority of entrepreneurs in Brazil believe in creating a large “Building Site”, which is spread across the country and immediately available. These goals set by ANATEL will generate new high volume services within the next five years that will certainly allow the growth of professionally structured enterprises in Brazil. The enterprise of a monopolistic culture, which has been in existence thus far will gradually disappear. Despite all the challenges of co-ordinating development and growth of businesses in a regulated market, the biggest challenge arises when the environment of transformation is ruled by world economic pressures and compounded by fast and frequent change. Successful National Enterprise Engeset – Engenharia e Servicos de Telematica SA (a company of Grupo Algar) is an example of such a successful national enterprise, and this is clearly illustrated by its performance during the last decade where it achieved an average growth of approximately 50%. All its management concepts have been developed, with excellent results throughout the company’s structure, and it is on its way to achieving its US$500 million goal, by 2003. The success of Engeset is attributed to the high level of professionalism within the company and its focus in particular to: the global national market, investment in competitive processes and automated procedures with a focus on total quality and customer care. “Marketing War” The Brazilian market will witness the creation of joint ventures, as one of the adopted measures, in preparation to face competition from foreign companies and the demands of the consumer. What companies may believe to be quality today has little significance to the consumer, who is starting to understand its power, by rejecting those offers that do not fully satisfy their interests or needs as a client. We are, in effect, witnessing a “marketing war”. A series of associations between national and international companies are already taking place, in preparation for the competitive environment. Most certainly those who cannot adapt, will not stay or be able to set up businesses in the Brazilian market. Innovation and creativity in the long run, will create pressures among the competitors, in their search for leadership in the various business sectors in the country. Considering the statement that Brazil will soon become a “Building Site”, another challenge for businesses will be the recruitment of specialised labour. The total absence of investment in education and training at Telebras in the last few years has created a vacuum of specialised human resources available. However, well structured enterprises have used their in-house knowledge to train their own workforce ahead of the expected demand for specialised human resources. It will prove essential for these companies to have their own resources and know-how in place for the success of the new alliances. Clients and suppliers will position themselves flexibly in relation to the alliances for the competitive environment, integrating to produce new value added products and services for consumers and users. The privatisation of telecommunications in Brazil, is based on the following basic principles: · stimulate private investment; · promote fair competition; · update techology and follow market changes; · assure universal service; and, · democratise the open access to the global communications network. Competition as a Necessity As discussed above, competition will be the best way to create a telecommunications sector that is more efficient, innovative and profitable, and once consumers increase usage, rates will undoubtedly fall. Competitiveness is a necessity; in the past it may have made sense to have a monopoly in telecommunications, as the majority of other countries have, mainly due to the high cost of technology and the yet to be reached economies of scale. Today, there are many more technological options available, which are associated with the opening of markets, and it is not only possible but desirable to have various network operators, interconnected and open to the global information highway, with non-discriminatory rates. In tune with the process of globalisation, competitiveness and technological innovation, Engeset has been developing strategic alliances, with the objective of making available know-how in engineered integrated solutions, and in tune with the objectives of its clients. The future is therefore in development and transformation. Invest in Human Potential Quality is becoming an icon in all commercial relationships. Experience in the maintenance field has shown that the value of quality is in continuity and not in the need to correct past failures or mistakes. Good service is one that is exercised to achieve zero faults, continuity and total availability to the user. More traffic means more revenue, which turns into profit, which will make possible more investment and better quality and closes the cycle of consolidated quality. Enterprises have to invest in the human potential, in search of a means to grow and generate opportunities, instead of just eliniinating disadvantages. The capacity to sustain an advantage through specialised labour trained by workers own employers offer advantages over the competition, be it through innovation or just preserving the peculiarities of company culture. Besides, companies should create an environment where people would not resist change, but expect it. This is the environment of a company that constantly tries to improve the quality of their products/services, before one of its competitors does. Conclusion Only then will it be possible to successfully compete in Brazil. It is good that many companies have already arrived at the same conclusion. Challenges will abound to the winners in the Brazil market, because this is our turn to make it happen, but it will only happen to the most competitive of companies.