COMMUNICATION-BRAZIL: Mobile Phone Use Jumps 10-Fold in 5 Years

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Jan 13 2000 (IPS) - Brazilians will have 35 to 40 million mobile telephones in their hands by the end of 2002, ten times the number existing when privatisation of the service began in 1997, predicts Communications Minister, Joao Pimenta da Veiga.

A 94 percent increase last year brought the total number of cellular phones in Brazil to 14.35 million, according to the National Telecommunications Agency (ANATEL), which monitors the sector’s objectives and compliance with regulations.

Last year’s jump was 20 percent beyond the 1999 goal set for cellular phones by a programme established before the system was privatised.

This year, experts predict a more moderate expansion of the sector, though mobile telephone companies hope to sell another seven to nine million new units in Brazil.

Once the pending demand for the phones is met, competition among the various providers is likely to reduce costs for the service, making them accessible to the population’s poorer sectors, stated minister Pimenta da Veiga in an address before the congressional Urban Development Commission.

Cell phone prices began falling last year, to the point that the simplest model sold for the equivalent of 110 dollars, a price even low-income domestic employees could afford.

The pre-payment system, which allows users to buy phone cards to make a set number of calls, found unexpected success as it means customers can easily control their telephone expenses. Pre-paid calls represented more than 80 percent of providers’ sales over the last several months.

“This phone allowed me to increase my income, but costs me almost nothing because I only receive calls, I make very few,” said taxi driver Alberto Pereira about his cell phone. His work situation is similar to that of street vendors or small-scale service workers, who do not have an office.

For the telephone companies, the advantage of pre-paid cards lies in reduced administrative costs as there is no billing involved, so there are there problems with customers failing to pay.

But these benefits also mean that there is no regulatory control over the phones, and users remain anonymous, making this type of telephone an ideal tool for crime.

In response, the Rio de Janeiro state government has approved a law requiring all users to register their mobile phones in an attempt to prevent their use for organised crime, a serious local problem.

The two cellular phone providers serving the state argued that obtaining a registry of those who already own the phones would be very difficult because it means convincing them to voluntarily take the time to register the units.

The Communications minister predicted that the Rio de Janeiro law would face legal opposition because states cannot legislate over telecommunications, which is an issue that falls under the national government and Congress’s jurisdiction.

Brazil, which had one of the lowest rates of installed fixed-line phones in South America four years ago – at 10 per 100 residents – has seen its status change with the arrival of cellular phones and the privatisation of phone services.

Fixed-line phones expanded by more than five million last year, reaching a total of more than 26 million. The goal of the programme begun with the July 1998 privatisation is to hit 40 million by the end of 2003.

The government, as well as the companies that provide the services or the products, expect the sector to maintain its strong growth trajectory in the immediate future. Despite the advance in recent years, Brazil is still far behind industrialised countries when it comes to telecommunications.

With 16 fixed-line and nine mobile phones for every 100 residents, Brazil lags behind neighbouring Argentina, where there are 21 and 13 phones, respectively.