Embratel, Telemar, Telefonica officially agree to negotiate tariff reset

Pedro Jaime, head of telecommunications at the Communications Ministry, announced Tuesday, May 13, that incumbents Embratel, Telemar and Telefonica have agreed to negotiate an annual tariff reset below inflation for the 12 months through June as measured by the IGP-DI index. Brasil Telecom hasn?t responded so far, he added.
The trailing 12-month IGP-DI is expected to reach 32% in June, Mr Jaime said, down from a previous projection of 34% thanks to recent currency revaluation.
No concrete proposals have been discussed. The Communications Ministry will now begin collecting data for use in the negotiations. ?I feel free to make a consistent offer and the telcos no doubt will feel free to do the same,? he said.

Asked whether universal access targets could be eased in exchange for a lower tariff increase, Pedro Jaime said the impact of such a measure on telco revenues would have to be analyzed in order to determine its feasibility. For now the ministry?s only goal is to ensure that the negotiations don?t jeopardize the ?economic and financial equilibrium? of the incumbents.
Mr Jaime also said he?s working on a decree for President Lula to sign with guidelines on renewal of the incumbents? licenses. He doesn?t expect to submit it for approval before May 20.