Embratel has announced the launch of a free Internet service provider called Click 21. Service began Friday, July 18, in Curitiba, Paraná. From August on, it will also be available in 100 other cities where Embratel already offers local service.
The strategy emerges in the wake of the long-distance carrier?s termination of its agreement with UOL, a leading ISP for which it acted as access provider. There?s no evidence of cause and effect, but TELETIME News has learned that Embratel had been trying since last year to persuade UOL to transform their partnership into a traffic sink business model whereby UOL would share in the revenue from traffic generated by its Internet service and Embratel would own the access lines and other infrastructure. This was Embratel?s strategy for facing competition from Telemar?s iG and Brasil Telecom?s iBest.
Our sources say UOL and Embratel failed to work out a satisfactory deal largely because other telcos offered UOL better terms. Neither UOL nor Embratel has commented officially. The reasons for termination of the existing agreement aren?t entirely clear, but the matter is before the courts.
Users of Click 21 get two email accounts with 30 Mb capacity each, antivirus, antispam, and other services. Embratel plans to include content of its own in the portal soon (www.click21.com.br).
By launching a free ISP, Embratel clearly aims to attract local traffic to boost expansion of its national network. This will increase the chances of receiving local interconnect rates from other carriers, paid when more than 55% of total traffic between two local carriers goes to one of them.
Embratel hasn?t said how much it?s investing in the venture or forecast numbers of users, revenue, market share etc.