The largest Brazilian telecom operators expect the next government to ease investments, simplify taxes and regulations, make network neutrality rules more flexible, and create subsidies for low-income households to acquire connectivity and devices.
These items appear on a wishlist presented by Conexis, which represents the main telecom operators.
The measures fall into the categories of investment incentives, competition, infrastructure deployment and tax equalization.
In the first category, among other requests, telcos call for a national blueprint for antenna installation in municipalities, and want cities to fully apply the federal antennas law passed in 2015.
Telcos also want tougher penalties and stepped up public security to curb cable theft.
They also propose the creation of the Internet Cidadã program involving subsidies for connectivity and devices for low-income households, as well as the creation of a program aimed at expanding connectivity in public schools.
Regarding competition, carriers call for a simplification of obligations and regulations and the harmonization of the network neutrality concept in the face of 5G.
In telcos’ view, the rule – according to which internet traffic must be treated equally, without discrimination, restriction or interference regardless of issuer, recipient, type or content – is a barrier to the development of business models.
“In order to materialize and increase these gains, policies that encourage investments and allow the adoption of a leaner, simplified and coherent regulatory model are necessary, so that companies in the sector can adopt business models that capture the full benefits of the new technology,” Conexis said.
Telcos also call for the implementation of the concept of “same service, same rules,” slashing what they see as an unbalanced regulatory approach toward internet companies and telecom service providers, even when similar products or services are offered.
At the same time, operators claim they should be entitled to more forms of self-regulation.
They also want the government to ensure “the security of investments made in radio frequencies acquired in spectrum auctions” and a reduction of costs associated with the use of light poles and related third-party infrastructure when passing cables and installing equipment.
Infrastructure And Taxation
On infrastructure, the main requests relate to the development of a national economic and industrial policy for the sector to incentivize financing and production of ICT goods and services, and to an acceleration of e-government initiatives.
Specifically, telcos call for the creation of a national digital transformation department, directly subordinated to the presidency.
They also want the strengthening of the national data protection authority, ANPD, and public policies for a “safe and orderly advance of critical digital infrastructures and digital security.”
A major concern for landline concession-holders, Conexis calls for a “fair and balanced” solution for the fixed telephony concessions conundrum, as mandatory investments in that service should be freed up and go to digital technologies and broadband expansion.
“In addition to prioritizing the agenda of innovation and technologies with specific programs under the responsibility of the government, it is essential to promote a stable market, with legal certainty, that encourages investments and strengthens the digital infrastructure market, such as datacenters,” Conexis said.
Regarding taxation, the industry reinforces its long-standing claim for a tax code reform, calling for the unification of the PIS, Cofins, ICMS, ISS and IPI taxes.
Conexis also advocates for a lighter burden on the sector development funds, which are fed with a portion of industry revenues, and for the reduction of income corporate tax down to OECD levels, as well as the exemption of PIS/Cofins social welfare taxes for all 5G infrastructure and the services chain.
Brazilian carriers also request that the government lowers taxation on 5G equipment imports and infrastructure to the levels of other Latin American countries.
To spur demand, telcos suggest the reduction of taxes on smartphones and tablets for low-income earners and the elimination of all taxes on telecom plans for this segment.
Market
According to Conexis, Brazil is the fourth largest global market in fixed broadband and the sixth in mobile telephony.
Still, according to the group, there are over 100,000 antennas deployed throughout the country and 344mn active accesses for telephony, broadband and pay TV. Furthermore, all 5,560 Brazilian municipalities rely on infrastructure for fixed and mobile broadband, according to the entity.
Telcos also said they have invested over 1.10tn reais (US$212bn), in adjusted terms, since 1998, when the sector was privatized, and paid 60bn reais in taxes annually. Of this taxation total, nearly half corresponded to state tax ICMS.
Further 6bn reais since 1998 have gone to sector funds, such as Fust or Funttel, but less than 9 per cent of that total was invested back in the development of the industry, according to Conexis.
