The problem of overcapacity

13 Nov 2003

Brazil’s telecoms minister Pedro Jaime Ziller has gone on record as saying that the country’s fixed line operators have raised charges for line rental and local calls too fast, with the result that their incomes have remained static. Moreover Ziller claims there are over ten million unused fixed lines across Brazil, despite the fact that 38.4% of Brazilian households do not have access to a fixed line. Anatel, the telecoms regulator, is currently holding a consultation on a proposal dubbed Aice, which would reduce basic line rental fees for low income families to just 35% of the usual price. The new plan could be introduced as soon as 2006 when the fixed line operators’ new concession contracts are due to come into effect.