Brazil Debates Prepaid Cell Phones
SAO PAULO, Brazil (AP) _ Telecommunications regulators were to meet with justice officials Tuesday to debate a ban on the sale of prepaid cell phones widely thought to be used in a shocking wave of organized, violent crime.
But analysts said a ban would likely face tough opposition from wireless carriers, who get most their revenue from prepaid contracts that make up about 95 percent of cell phone sales.
Justice Minister Aloysio Nunes Ferreira was scheduled to meet with Renato Guerreiro, head of telecoms regulator Anatel, and Communications Minister Joao Pimenta de Veiga to discuss ways of clamping down on the use of prepaid phones, whose calls cannot be traced.
President Fernando Henrique Cardoso, in his weekly radio address Tuesday, said he would be discussing the ban with Guerreiro because prepaid mobile phones had ``become an instrument of crime.″
Sao Paulo state Governor Geraldo Alckmin on Monday requested Anatel to consider banning prepaid units _ one of 13 proposed emergency measures to combat kidnappings and organized crime after the brutal weekend assassination of a popular leftist mayor of an industrial city near Sao Paulo.
Anatel officials said they had no immediate comment on Alckmin’s proposal.
Neither did officials at Telesp Celular Participacoes SA, Brazil’s biggest wireless operator with about five million clients in the Sao Paulo region.
Nearly two thirds of Telesp users are prepaid subscribers.
Prepaid accounts are popular in emerging markets because they are cheaper for consumers and reduce default risks for carriers.
According to Credit Suisse First Boston telecoms analyst Andrew Campbell, the ban is ``unlikely to happen,″ as ``consequences for the sector could be drastic.″
Instead, Campbell wrote in a research note that Anatel could ask operators to implement systems to track prepaid calls, a move that would mean fresh investments by carriers.