Telemar aims within 12 months to capture a 70% share of the long-distance traffic out of Region 1 (16 states in the North, Northeast and Southeast) to other parts of Brazil, corresponding to some 3 billion minutes per year. The fixed-line incumbent began offering the service on July 20. Ronaldo Iabrudi, president of Telemar Norte Leste, explains the figure by noting that his share of intra-regional traffic is 70%. The main instrument for achieving the target will be an offering of loyalty plans with discounts based on call volume. ?We have no intention of starting or joining a price war. Other players have done that and gone broke or almost,? he says, referring to Embratel and Intelig. Region 1 accounts for a third of all domestic long-distance traffic, with 50 billion minutes and revenues of between 7bn and 7.5bn reals per year. Telemar is investing heavily in an advertising campaign for Region 1 due to begin this week. In addition, it has a 300-strong telemarketing team, with 200 positions for the residential market and 100 for the corporate market. The goal is to sell the new service to existing customers: 14 million residential subscribers and 1.15m companies. Telemar also plans to compete in other regions, offering long-distance service to corporate customers under the long-distance portion of the PCS license granted to Oi. It completed the requisite interconnect agreements some time ago when Oi received its license, he says.
Ronaldo Iabrudi says he has ?absolutely no problem? with relying on an injunction from the Regional Federal Court of Rio de Janeiro (TRF2) rather than a license extension or authorization from Anatel. ?Luiz Guilherme Schymura, director-general of Anatel, told me he won?t try to have the court order discharged because it?s in line with the competition-based model implemented since privatization,? he says. As for any attempt by Embratel to stop Telemar from competing in long distance by seeking a counter-order, Mr Iabrudi says public opinion won?t be favorably impressed. ?Now 15 million customers know they have a choice. They?ll see Embratel as an arrogant opponent of competition if it tries to stop us,? he argues.