"Competition doesn?t cure all the ills of capitalism," quips Manoel Ribeiro, managing director of Brasil Telecom (BrT), in response to Communications Minister Miro Teixeira?s statement in an interview with a major business daily, Valor Econômico, this week that unbundling must be written into Brazil?s telecoms law in order to boost competition and drive down the price of a phone call. Mr Ribeiro disagrees: Experience elsewhere has shown that unbundling alone is no guarantee of competition, he says.
Asked to comment on the Communications Ministry?s offer to negotiate on an annual tariff adjustment that falls short of past inflation measured by the IGP-DI index, he says without doubt anything less than the contractually agreed adjustment will ?jeopardize the [ILECs?] economic and financial equilibrium?. Nevertheless, BrT is prepared to sit down and negotiate with the Government.
On the idea of removing the index link altogether in 2006, when the ILECs are due to renew their licenses, he claims to be unaware of any basis in law for such a change since the index was specified in the very rules under which Telebrás was privatized. Anyway the wrong approach altogether is being taken in this discussion of license renewal. "The contracts will simply be extended for another term in 2005. That?s not the same thing as renewal,? he says. "We know the Government has the power to change the terms unilaterally, but only if the changes are in the public interest and don?t endanger the financial survival of the telephone companies.?
Competition
