Brazil Phone Cos OK Rate Hike For Calls To Mobiles-Report

SAO PAULO -(Dow Jones)- Brazil's phone companies have agreed to a 7.99% hike for calls made from fixed-line phones to mobile phones, local press reported Thursday.

Communications Minister Eunicio Oliveira on Wednesday told reporters the fixed and mobile operators had reached an agreement, which will be formally unveiled later in the day, according to the newspapers.

Anatel, Brazil's telecom regulator, and the ministry would not confirm the reports when contacted Thursday morning.

A source at the ministry confirmed Wednesday's meeting had taken place and that Anatel will examine the agreements Thursday morning before deciding whether to approve them.

Anatel has always set the fixed-to-mobile price hike, but as part of the deregulation of the local telecoms industry, this year the operators were supposed to negotiate bilateral agreements for the first time.

They were supposed to have finished talks in January, but the dispute has dragged on for months and the newspapers reported that Oliveira and his team had to strong-arm the operators to settle what has become a bitter dispute.

Fixed line operators, including Telemar (TNE), Brasil Telecom (BRP) and Telesp (TSP), are unhappy at the large share of the revenues that mobile operators receive for calls from fixed lines to mobile phones.

This price structure was set up to help mobile operators through the expensive phase of building networks, and the fixed-line operators claim this is a subsidy that should now be phased out.

The mobile operators reply that they are still investing heavily to keep up with the scorching growth rates seen in the mobile industry.

These operators, which include Vivo, the joint venture of Spain's Telefonica (TEF) and Portugal Telecom (PT), Claro, of Mexico's America Movil (AMX) and TIM Brazil, owned by Telecom Italia SpA (TI), also say the rules were clearly laid out in operating contracts and should therefore not be changed.

The agreement between fixed and mobile operators will also trigger a broader annual rate hike for fixed-line operators that must be authorized by Anatel.

-By Rogerio Jelmayer and Matthew Cowley, Dow Jones Newswires; 5511-3145-1480; brazil@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 7th April 2005