Telecoms in Portugal - are you being robbed?

I read that, for decades, telecom concessionaires have made incredible profits in Portugal, writes Jack Soifer.

There are sectors where large scale is beneficial but almost anywhere in the world, there is public capital or a golden share in place to prevent abuse by one dominant corporation.

The monetarist theory is that, even where there are cartels, the regulatory agency can act in order to protect the interests of the country and of the consumer. In the real world, cartels use their influence to prevent this, such as Portugal's ANATEL which is meant to protect the consumer.

When there is a report of abusive practice, ANATEL writes that it is 'an isolated case' being brought to court, ignoring the fact that there are thousands of similar complaints. Most of those who have been ripped-off, after complaining at the store, give up and switch to a competitor which may also cause problems. Telecoms are nice to new customers during the first two years in order get the contract renewed for another two years. Once renewed, most customer will not pay 300 to break the contract.

Portugal has very expensive telephone charges compared to other EU-countries. The system is poor quality since Portugal Telecom no longer has access to public capital. PT no longer is a Portuguese company, an imposition by the Troika, whose privatisation theories have been proven wrong in many other countries.

In Portugal we pay €50 a month, 440% more for same package that costs R$50 in Brazil.

In Portugal, I pay 80% more than I pay in Sweden, although there is larger bandwidth and higher speed. Labour costs in Sweden are double, and Swedes pay half as much for the package.

"Abuses? It's to guarantee free competition by preventing abuse of dominant power, limiting each operator to eg 0.5 million customers"

There are two ways to avoid this 'theft':

1. Go back to the previous system, with one of the concessionaires having public capital and with peolple's representatives of this capital sitting on the Board, i.e. not hand-picked politicians. Ensure free competition by preventing abuse of market dominance, limiting each operator to 0.5 million customers.

2. Allow one concession in each of the Portugal's six regions, connected by PT, as was the case for TELEBRÁS in Brazil and TELIA in Sweden. With five competitors per region, we could have 30 operators unlikely to create a cartel to dominate ANATEL.

"Telecoms is a strategic sector, vital to the security of a country and its enterprises. A million emails were stolen by hackers working on telecoms"

Years ago, when a respected Northern European company proposed to invest in this industry, it was asked to make a 'donation' to a political party. It pulled out.

Telecoms is a strategic sector, vital to the security of a country and its enterprises. Remember, a million emails were stolen from by hackers working on telecoms! Who was punished? How many industrial secrets were stolen?

You pay €800-980 more per year than in Brazil and €500-650 more than in Sweden and the UK for the same service! How much in five years? Who profited?

All telecom corporations in Portugal have three funds as majority shareholders. These three agree on how to profit from the cartel. The former CEO of ANACOM was suggested by Goldman Sachs and knows what these funds expect. He has an incredible high salary to ensure the cartels works freely.

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