 | Issue: | Latin America 2002 |
| Article no.: | 10 | |
| Topic: | The Dynamics of Telecommunications Evolution Poses New Challenges to ANATEL | |
| Author: | Luiz Guilherme Schymura | |
| Title: | President | |
| Organisation: | ANATEL, Brazil’s National Telecommunications Regulatory Agency | |
| PDF size: | 20KB |
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Article abstract
Brazil’s model for the liberalization of the telecommunications sector has served well, but, considering the recent transformation of the sector, changes are needed. It will be a challenge for ANATEL, Brazil’s regulatory agency, to foster competition, industry growth, user protection and the adoption of new technology. ANATEL will also have to guide the expected consolidation of the industry. Clear, dependable, transparent rules that protect the interests of private companies as well as the needs and rights of citizens are needed.
Full Article
The telecommunications sector finds itself at a very important stage of its development in Brazil. The present moment introduces opportunities and challenges as significant as those witnessed in the impressive expansion of the last five years. “The entry into operation of Personal Mobile Service companies, for instance, is expected to add even more competitiveness to the segment of mobile telephony.” After the initial reforms in the Brazilian telecommunications scene, several legal restrictions are now being loosened with regard to the action of companies in fixed as well as mobile telephony. The entry into operation of Personal Mobile Service companies, for instance, is expected to add even more competitiveness to the segment of mobile telephony. As I say, such competition, while desirable for the benefits it brings to users at large, requires ANATEL to constantly refine its understanding of the economic and technological issues involved, as well as their consequences in a regulatory framework. With regard to wireless communications, the migration towards 2.5G and 3G networks shall provide unquestionable benefits to users, with the availability of new services. As of now, ANATEL’s agenda shall include items such as the increment in mobile data services, mobile Internet, and wireless e-commerce, among others. The telecommunications sector, with its innovative dynamics, poses new challenges to the Brazilian regulatory authority, among which the following stand out: 1) providing a regulatory model and giving ANATEL the instruments needed to develop a healthy competitive environment for the companies, with marked and positive effects for their users; 2) a step-by-step follow-up of developments, both domestically and abroad, of patterns and norms regarding interconnectivity and interoperability among the several networks, technologies, services and applications available, which should require enough regulatory flexibility to allow the necessary adaptations; 3) analyzing and controlling mergers and acquisitions, with the agency playing a guiding role in the consideration of these activities by the Administrative Economic Defense Council (CADE); 4) assessing the possible impact that technological convergence might produce upon the several market segments making up the sector, as well as on the telecommunications services provided; and 5) creating the conditions required to attract new investments, as needed to insert Brazil in the new knowledge economy, leading the country to a wider and socially fairer road to development. These aspects provide only an idea of what lies ahead. However, if there is point of intersection this would be the agility that will be required of the Agency in its decisions. Such agility, however, must be pursued with all rigour. All pertinent aspects must be appreciated and widely discussed prior to decision-making. “The present moment promises a major advance towards the maturation of the telecommunications restructuring process.” The evidence of the strength and modernity achieved by the Brazilian telecommunications systems are multifold, with economic and social reflexes that put Brazil among the most important countries in the world. We are pushing forward into another phase of the major, strategic project derived from the Brazilian telecommunications model. The present moment promises a major advance towards the maturation of the telecommunications restructuring process. This is driven by efforts to enhance competitiveness, foster service provider and industry excellence and technological advances in an attempt to include all citizens, in the near future, in the knowledge society. This future, in fact, has already started to materialize. This optimistic and unwavering view is supported by expressive universalization results, as well as by quality indicators, especially in fixed telephony and mobile services over the last years. As regards fixed telephony, we closed 2001 with 47.8 million fixed lines installed, a 436% growth compared to the mere 13.3 million lines existing in 1994. Telephone density, that is, the number of lines installed compared to country’s population, has also increased significantly. For each group of 100 inhabitants, the number of telephone terminals installed went from 8.6 in 1994 to 28.2 in December 2001. It should be noted that in 1994 the Brazilian telecommunications facilities in operation accounted for 26% of the facilities in all Latin America. In 1997, this percentage soared to 32%, and in 2001 more than 40% of the fixed telephones available in the region were installed in Brazil. The marked growth of Brazil’s telecommunications sector, especially in the fixed telephony sector, proves that the Brazilian telephone plant’s growth is much faster than that of other Latin American countries. Hence, the country accounts for an ever growing share of the region’s operational telcommunications capacity. Brazil’s fixed telephony sector emphasized the installation of public payphones. Public payphones are considered to be an important instrument to enhance the citizenship and inclusion of an important segment of Brazil’s society by the use of telecommunications. In 2001, almost 1.34 million public phones were installed in Brazil. In 1994, only 300 thousand were installed. This growth of nearly 450%, places Brazil in third place in the worldwide rankings of public-use telephone services universalization. The rate of digitalization is also worth mentioning. Brazil, from a technological point of view, has an extremely modern telecommunications network comparable to some of the best telephone infrastructures of other countries in the world. More than 97% of the telephones existing in Brazil today use digital technology. The ratio of plant digitalization is expected to reach 99% in 2005. The initial regulatory demand required companies to reach merely 75% by 2001. Brazil is entering the era of Personal Mobile Services (PMS) – an important step in the segment of advanced mobile services. The existing Cellular Mobile Services (CMS), though, have shown an extraordinary increase in customer satisfaction, proving its relevance for Brazilian society. In 1994, there were 800 thousand mobile telephones in Brazil. By 2001, this number had grown to 28.7 million. Of this total, 68% were pre-paid service accounts. With the universalization of mobile services of 2001, Brazil now ranks among the top nine countries in the world; it expectes to improve its ranking by the end of 2002. The density of mobile telephone services also experienced a fantastic boom, going from 0.5 to 17 mobile telephones per 100 Brazilians. Universalization and competition have been the cornerstones of another major achievement – the reduced price of services. The basic basket of residential fixed- line telephone services (activation, subscription, local pulse, per-minute value of long-distance and international calls) went from R$60 in 1994 to little more than R$35 in December of 2001. In the context of Cellular Mobile Services, the results have been even more impressive and favourable to users. In 1990, upon the introduction of these services in Brazil, the activation fee was $22,000. In 1997, this cost had been reduced to $136, and in 2001, to $18 or was even, in many cases, free. The rates charged by service providers in for post-paid contracts were also greatly reduced, either as a result of competition or the several alternative plans available to users today. Since the privatization of the Telebrás System, on July 29, 1998, national and foreign investments in Brazil’s telecommunications sector have been increasing steadily. In 1998, a total of R$12.3 was invested, with another R$12.2 billion coming in 1999, R$16.2 billion in 2000, and R$21.4 billion in 2001. This year, the telecommunications sector accounted for 19.9% of all foreign direct investments in Brazil. “Meeting the interests of private companies as well as the needs and rights of citizens.” Conclusion The opening of our markets, and the daring restructuring of Brazil’s telecommunications rely, and will continue to rely, on a modern regulatory framework, guided by clear, dependable rules of absolute transparency in all respects, meeting the interests of private companies as well as the needs and rights of citizens. ANATEL, as a regulatory agency, has had and will always have among its primordial objectives the universalization of services as per the policies approved by the government. Equally important will be the fostering of competitiveness and technological advances for the Brazilian telecommunications sector. As a result, I am certain that the Brazilian population will be able to rely on telecommunications services of increasing quality and low price.
