Brazil edged nearer to its stated goal of liberalizing its telecom industry when the Canadian-Brazilian consortium Americel S.A. became the first private mobile phone operator to compete against the state-owned carrier Telebras.
Americel launched its digital cellular mobile phone system in the city of Brasilia, offering 50,000 lines with hopes of adding another 50,000 in the next three months. It eventually hopes to add the neighboring city of Goiania in December and more remote regions by early next year. The company hopes to compete by offering a lower sign-up fee and lower monthly rates.
The company acquired its license only six months ago, when it bought a 15-year B-band license for $311 million June 4. It was the only bidder for the largely rural license.
The rapid buildout, however, prohibited comprehensive testing, and as such, the launch was not without incident. Americel and the Telebras subsidiary, Telebrasilia, discovered an interconnection problem that prevented users from being able to connect to the Telebras’ existing system for the first few days.
Americel is comprised of Bell Canada International, Telesystem International Wireless, Citibank Corp., Brazilian Pension Funds, Banco do Brasil, Opportunity Asset Management, BB Investmentos and La Fonte Partipacoes.
Brazil hopes to liberalize its telecom market by next year. The B-band program is the first step in that process. Under the program, the government hopes to sell a total of 10 regional B-band licenses, raising about $5 billion in the process. Four licenses have yet to be awarded.
A-band cellular operator Telebras will be grouped into smaller holdings that will be privatized, according to the government, which also plans to sell the landline operations of the state-owned operator in three regional portions.
The government believes 10 million to 12 million citizens will use cellular services by 2000. Cellular services currently enjoy a 70-percent annual growth rate in the country.
