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 When state-run Telesp Telecom was privatized in São Paulo, many Paulistanos were hopeful that telecommunication services would finally be work. For years the telecom sector in Brazil had been stranded, and the market opening was welcomed by many.
The last incident with private telephone company Telefônica on July 3rd, however, proved those predictions wrong, as 2.7 million people were unable to connect to the Internet for hours. After this episode Anatel (National Telecommunications Agency) didn't allow Telefônica to sell in São Paulo its broadband Internet access service called Speedy.
According to Folha on line, in the beginning of the year Telefônica was already leader in complaints for the third year in a row. Last March alone, there were 3615 complaints registered against Telefônica, more than any other company.
The company had already held the number 1 rank in complaints back in 1998, 1999, 2000, 2001, 2006, 2007, including charges for services that were not fulfilled. The article by Folha revealed, however, that the number of complaints decreased 17% if compared to last year.
The telephone crisis has brought to light a major issue. São Paulo Telecommunication sector remains vulnerable due to the lack of competition, along with severe deficiencies in phone services in Brazil.
Despite success of the privatization, allowing Brazil to open its door to new telecommunication technologies, many still wait for better services and prices.
Many customers in Brazil pay extremely high rates just by dialing a cell phone from their LANline. The crisis prompted business magazine Exame to publish extensive article this month, indicating the flaws of the telecom system.
According to Exame, Telefônica has publicly admitted that urgent changes must be taken. "We recognize that we have committed many errors, and we are trying to implement corrections in a timely and speedy way," affirmed Antonio Carlos Valente, Telefônica's president in Brazil.
São Paulo consumers may still struggle, as there is no other competition for Internet service in São Paulo. Although, some paid TV channels do offer internet access, the service is not provided in all regions, while wireless cell phone network is not always reliable.
For Carlos Ari Sundfeld, professor of Getílio Vargas Faculty of Economy and Business Administration, also one of the authors of the telecom privatization, the only way to stimulate competition is to create a wireless network, which is much cheaper, and can be developed faster.
"There should be a compulsory measure to lower prices and make unbundling an instrument of competition, affirmed Ari Sundfeld. In São Paulo, one third of the population reside in areas, where there is no other alternative for telecom services other than Telefônica.
For Sundfeld unbundling is the only possibility for stimulating competition. He believes that Telefônica should be able to lease its infrastructure allowing other companies to operate and commercialize broadband services.
Ethevaldo Siqueira, a journalist specialized in technologies, believes that Anatel decision came a little too late: "There are already gigantic problems in this sector, Anatel can no longer tolerate a company that can promise services, but not deliver it."
While the debate goes on, São Paulo consumers will have to wait.
Alexander DeSouza is a journalist, having graduated in Social Communication Studies at Pontifical Catholic University in São Paulo, Brazil. He lived in the US and Canada for close to 10 years and participated in volunteering activities in social works agencies. DeSouza currently lives in São Paulo where he teaches English as a Second Language for both private English Language Institute and Private High-School. He has already participated as an actor in three English plays in Brazil and is pursuing further advancements in his career. He is particularly interested in economics, history, politics and human rights articles.
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