Anatel to create index for tariff reset

A price cap will come into force in 2006 for ILEC user charges under the recently approved new license and the new telecommunications policy document issued by Government decree.
Differently from the original proposal, the IGP-DI index will make way for a compound index based on the cost spreadsheet for the telecoms industry.
Anatel announced the changes on Wednesday, June 18.

The industry index will apply to the telcos? cost structure a factor known as K, based on a compound of productivity and a formula to smooth out distortions due to inflation in a given period. In 2006 and 2007 Anatel will use a provisional system for calculating productivity based on its own experience and that of Telebras. Meanwhile it will retain consultants to work out a definitive productivity factor, which will come into force in 2008.
The ?excursion? factor (permission to increase some items by a certain percentage, offset by a decrease in others) to be applied to the tariff basket will be 5% for all modalities, instead of 9% currently.
Marcos Bafutto, Anatel?s head of private services, said the aim for interconnect rates is to base them on costs from 2008 on. Until then they will remain capped at 50% of user charges, falling to 40% in 2007. Long-distance interconnect rates will be capped at 30%.