Privatization in the Telecommunications Industry: The Brazilian Case

Abstract

This article presents a brief discussion of privatization and liberalization in the telecommunications industry. It outlines some of the important changes that have taken place in recent years such as: i) increase in competition, especially in the supply value-added services like voice and data transmission; ii) entry of cable TV companies in local telephone services supply; iii) supply of new services; iv) need for new regulation mechanisms and interconnection rules; v) intensification of mergers and acquisitions that led to greater concentration in the industry. The work analyzes some international experiences, for example privatization of British Telecom (UK), ENTEL (Argentina) and TELMEX (Mexico). It also presents some lessons. Although it isn't a case of privatization, the break up of AT&T is also analyzed because of its importance. Finally, it looks at the present conditions of telecommunications in Brazil and its future prospects.

JEL Classification: O32, N66, L96