International Institute of Communications 2011 Annual Conference
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1 International Institute of Communications 2011 Annual Conference The ICT landscape in BRICS countries: Lessons from emerging economies (R&D, innovation and trade) BRAZIL S INITIATIVES TO ATTRACT INVESTMENTS IN R&D AND TO FOSTER THE TELECOM INDUSTRY October 2011 Simone Scholze Executive Superintendent Johannesburg, October
2 GDP per Capita x Fixed Lines and Cellular Density Real GDP Per Capita Variation x Telephone Density Variation (fixed lines and cellular) Telephone Density GDP per capita (R$) GDP per capita at Current Market Price Cellular Density Fixed Lines Density GDP Increase + Democratization of Access 2
3 Balance of Trade Telecom Products US$ billion Balance of Trade by TELEBRASIL e Teleco Exports Imports Net Trade Balance 3
4 Telecommunications Sector Employment Million Telecommunications Sector Employees by TELEBRASIL e Teleco Industry branch is the less representative of the sectors There is a strong demand for high technology products and technical capacity 4
5 Telecom sector difficulties Strong dependency of equipment imports High trade deficit Low level of investment in R&D Capacity building needs High initial cost of telecommunication infrastructure 5
6 Reasons to face the difficulties Productivity increase Efficiency gains New services and products provided Lower dependency and vulnerability (resilience) to external market oscillations 6
7 R&D Regulation opportunities Growth of telecommunication sector Market impressive enlargement Investment forecast of US$ 180 billion till Brazil s resistance to global economic instability; higher confidence in the economic and financial fields Public policies supporting the improvement of the national production and local R&D content 7
8 Proposal of New Regulation to Foster R&D and Innovation in Telecommunications 8
9 RD&I Regulation Proposal Fundaments LGT (Telecom. General Law) Art. 2 The Public Power has the duty to: V create investment opportunities and estimulate technological development in a competitive environment PGR (General Regulation Plan) Aproved by Resolution No. 516/08 Short term actions Foresees the edition of a RD&I Regulation Legal Basis Regulation on R&D&I Proposal Law #12.349/10 & Law #8.666/93 Possible margin of preference at public biddings for products and services containing national technology Ordinance No. 178/08 - Ministry of Communication Anatel must promote the development of telecommunication products and services in Brazil 9
10 Anatel s Competencies Execution of telecommunications public policies in association with other government and funding institutions Management of spectrum use and radiofrequency auction ANATEL Regulatory powers Telecommunication Services Licensing Enforcement and certification and type approval 10
11 Regulation on R&D&I Goals To strengthen partnerships among operators, industry, universities and research institutions Encouraging operators (searching for technological solutions in Brazil) Increasing demand over the local industry for domestic products and services (using the purchasing power of operators) Development of the national telecommunication market To increase direct investments in R&D&I in the telecommunications industry in Brazil 11
12 Some other initiatives Notices for Radiofrequency Auction Commitments of coverage Notice 3G Band H Notice 450 MHz Notice 3,5 GHz Obligations of investment in local industry and development of technology Notice 2,5 GHz Notice 3,5 GHz
13 Some other initiatives Presidential Decree establishing the Brazilian National Broadband Plan (May 2010), which goals are: the dissemination of Internet broadband access the promotion of digital inclusion and the creation of new and more qualified jobs the improvement of e gov services and of computing and ICTs skill to enhance national competitiveness and more technological autonomy in certain niches The program has been structured into four main action groups: regulatory actions that foster competition and rules of infrastructure that create incentives to the expansion of telecommunication networks financial and tax incentives for the provision of broadband access service, aiming to contribute to reduce cost to the population industrial and technological policy able to meet the demands generated by the Plan and the setting up of a national telecommunications network, with focus on wholesale, neutral and available infrastructure for any service provider
14 Some other initiatives The Government will submit to the Parliament a proposal of a special tax regime for the National Broadband Plan the tax burden for equipment and infrastructure works necessary for the deployment of broadband networks The exemptions should result in a tax waiver on the part of the Federal Government of US$6 billion by The expectation is that private investment in high speed networks increase by US$20 billion over the next four years. Furthermore, the Federal Government opened a dialogue with states governments in order to reduce the tax burden incident directly in the telecom service provision, which are at states level, aimed at reducing final consumer prices charged.
15 Some other initiatives The Government had previously adopted measures of tax relief with success with the purpose of enlarging the citizen s access to technology. In 2005, the Digital Inclusion Program, by means of law No /2005, reduced to zero the rates of some federal taxes imposed on the gross retail sales of PCs, notebooks, and modems. Recently, other equipment known as tablets were also included on the list of equipment subject to tax reduction. One of the goals of the measure is to encourage the setting up of more companies in Brazil, in addition to reducing the final price for user. For the telecommunications industry view, the main contribution of this legislation is to reduce an important barrier: the affordability of access equipment.
16 Some other initiatives Commitments to FIFA World Cup 14 & Olympics 16 To promote the establishment of telecommunications infrastructure for voice and data with high reliability and quality, reaching areas that are now classified as under served To allocate specific frequency bands for systems to be used in the organization of events To implement 4G networks in all host cities for 2014 FIFA World Cup To promote equipment trade with the purpose of temporarily serve overseas users and the provision of terminal equipment for public use at reasonable prices To provide scarce resources necessary to implement digital network for public security and for transportation sectors To enhance international roaming contracts and to reach fair roaming prices To implement a new spectrum monitoring system in Anatel compatible with cutting edge technologies features and for satellite communications systems
17 Thank you! Simone Scholze Superintendent Executive 17
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