The absurdity of cell phone rates in Brazil.

For the past 20 years, many Brazilians dreamed of one day owning a cell phone. In the last ten years, many have turned that dream into reality, but most cannot use this service as they would like because Brazil is among the three countries with the most expensive mobile and landline telephone service prices on the planet.

According to a study by the ITU (International Telecommunication Union), a UN agency, Brazil ranks 125th out of 165 countries when considering the weight of cell phone bills on consumers' wallets, and the country ranked first is the one where cell phone expenses represent the least in relation to total spending.

In 2011, mobile phones represented, on average, 8,5% of the Brazilian's income, while in Hong Kong, the leader in low prices in this field, mobile phone bills represent 0,1% of consumers' income.

President Dilma dared to challenge the powerful companies in the electricity sector, which will provide the Brazilian people with a 20% reduction in electricity bills, in addition to contributing to the country's development. Among all the challenges of managing a large nation, she should now face another: taking measures that will lead telephone companies to lower the rates charged to consumers.

Those who travel or live abroad for a period of time are often impressed when they compare the prices of mobile and landline telephone services in Brazil, as well as internet plans, with those in countries such as France, England, and the USA.

A 2012 study by the European consulting firm Bernstein Research on telecommunications indicates that Brazil is one of the three countries with the highest mobile phone rates in the world, along with South Africa and Nigeria. The study took into account the Gross Domestic Product (GDP) and the average prices of tariffs in 17 countries.

In Brazil, mobile phone users pay an average of US$0,24 per minute, a value similar to the US$0,23 in Nigeria and the US$0,26 in South Africa. Among the countries with the lowest rates and GDPs close to Brazil's are India, where the rate is US$0,01, Indonesia and China where the minute costs an average of US$0,03. Russia, Egypt and Mexico have rates of US$0,05 and are close to the value practiced in the United States.

Among European countries, the United Kingdom has the lowest rate, at US$0,14, while Spain has the highest rate per minute in the bloc, at US$0,21.

According to research by IBGE (Brazilian Institute of Geography and Statistics), the growth in mobile phone users in the country between 2005 and 2009 was 21,1%. Therefore, operators cannot claim that their profits are not high enough to allow for a reduction in tariffs and still guarantee continued investment in the sector.

According to experts, the main culprit behind the high tariffs is the interconnection fee or VUM (Mobile Usage Value), which operators pay each other for the use of their networks. In some European countries, the interconnection fee has been almost eliminated to encourage the use of mobile phones.

The Brazilian National Telecommunications Agency (Anatel) wants calls made from cell phones to mobile devices of other operators or to landlines to have lower prices, closer to those charged for calls between customers of the same operator. Why is the price of a call within the same network four, five, six, seven times cheaper than a call outside the network? The public cannot understand the reason.

Anatel has just approved a plan in which the price per minute, in the case of interconnection fees, currently around 0,43, should drop to 0,33 in 2013, 0,29 in 2014, and the trend is for it to fall to 0,10 in the coming years. Will this be enough to lower the rates?

Approximately 80% of cell phones in Brazil are prepaid. Cell phone operators argue that maintaining prepaid customers, who spend an average of R$8 per month, does not generate revenue for the service and results in lower profits in developing countries, affecting the price per minute.

In the country, approximately 35% of mobile operators' revenue comes from interconnection. The drop in the interconnection rate may initially reduce the profits of mobile operators, but it will encourage the use of mobile phones for calls and other services, offsetting the revenue decline.

Contrary to what some claim, the cut in interconnection fees would not cause a drop in investments by mobile operators in Brazil, one of the fastest-growing mobile telephony markets among emerging economies, because in higher-income countries the demand for new users is about to reach its limit.

A new cost model to be promoted by the government through Anatel and entities linked to the sector should analyze, in addition to the impacts caused by VUM (Variable Usage Metering), the weight of taxes, which in Brazil represent on average 42% of tariffs, while the world average is 17%.

Currently in Brazil, we have three types of taxes applied to telephony: ICMS, PIS, COFINS, in addition to the mandatory contribution to two funds, FUST (Universal Telecommunications Services Fund) and FUNTEL (Fund for the Technological Development of Communications).

In this discussion, it is necessary to remember that consumer participation is extremely important. Anatel has just extended the deadline for contributions to the regulations of the regulator's User Council until February 16, 2013.
The agency's proposal is that fixed-line telephone companies and operators with at least one million users across any of the services they provide should establish a User Council in each region of the country where they provide services.

These councils, comprised of users and consumer protection organizations, have an advisory role, focused on evaluating services and the quality of customer service, as well as formulating suggestions and proposals for improving telecommunications services in the country.

The time is now. We can't just criticize. We must participate by proposing solutions!