Oi, Telemar?s PCS arm, sold 3,000 GSM phones over the weekend and now has 6,000 customers (including 3,000 kept on from the test phase). Oi began delivering commercial service on Tuesday, June 25. Management says demand for postpaid plans is surprisingly high. Around half the current customer base opted to have airtime billed at the end of each month. One reason could be that Oi doesn?t charge a separate subscription fee on postpaid phones. Instead, subscribers pay a fixed monthly amount that entitles them to so many minutes of airtime. Although the volume of postpaid customers is unexpectedly large, the proportion is likely to change to 80% prepaid and 20% postpaid by the end of the year, says CEO Luiz Eduardo Falco. The aggregate customer base is set to reach 500,000 within 12 months and 10 million by 2010. As for market share, the target is 30% of new users, he says.
A novelty offered to prepaid customers is the right to choose the day-part during which reduced rates apply. ?Other operators simply tell customers how and when discounts apply. Oi leaves the choice up to the customer,? says Luiz Eduardo Falco. There?s nothing new about handset prices, however. They start with the Siemens A40, which costs 199 reals (now about 69 US dollars) for postpaid and 249 reals (86 USD) for prepaid. These prices are similar to the competition. ?The telecoms industry can no longer sustain a price war in the handset segment,? Mr Falco says. ?It?s impossible to sell handsets for less than 100 reals if they cost at least 60 USD.? Oi is initially operating in ten states (Rio de Janeiro, Minas Gerais, Bahia, Sergipe, Pernambuco, Alagoas, Rio Grande do Norte, Paraíba, Ceará, and Pará). Coverage will extend to three more (Maranhão, Piaúi, and Ceará) in about 20 days? time. Espírito Santo will be included within 30 days. Roraima and Amapá will have to wait until early 2003. Oi will then cover all 16 states in Telemar?s concession area, Region 1. Initially, Oi?s GPRS data service will be available in only five cities: Rio de Janeiro, Belo Horizonte, Salvador, Recife, and Fortaleza.