SAO PAULO, April 7 (Reuters) – The Brazilian government
could force fixed-line telephone companies to lower rates and
invest in expanding their network in order to ensure affordable
service for the lower classes, according to a report published
on Saturday.
The Folha de Sao Paulo said the government wants to foster
competition and anticipate contract negotiations which were
initially scheduled for 2015. Among other measures, it is
considering eliminating charges for calls between different
providers.
The new measures would affect land-line operators such as
Telefonica Brasil, a unit of Spain’s Telefonica
, and Embratel, controlled by the Mexican
billionaire Carlos Slim.
Big operators will be required to beef up investments in
their networks and even rent out some network capacity to third
parties in order to foster competition, Folha said, quoting
unnamed government sources.
Companies could also be forced to eliminate current flat
rates for the basic service as well as charges for calls placed
between competing operators.
Revenues from fixed-line services have been declining in
Brazil while wireless operators have seen profits grow at record
levels.
Folha said the companies are already exploring the possible
scenarios and may challenge any decisions in court.
