Amid privatization talks, Brazil's postal service taps MVNO supplier

Tuesday, May 17, 2016

Brazil's EuTV has won a public tender to set up the mobile virtual network operator (MVNO) of Brazilian postal service Correios, as talks regarding the privatization of the state-run service intensify under interim president Michel Temer's government.

The postal service has long aimed to create an MVNO to sell Correios-branded SIM cards. The first talks on this began nearly five years ago.

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Correios forecasts revenues of nearly 4.5mn reais (US$1.29mn) with the sale of SIM cards and 2.1mn reais from prepaid top-ups in 2017.

EuTV, whose commercial brand is Surf Telecom, made a proposal with a premium of 17.9% over the minimum stipulated prices.

The MVNE (MVNO enabler) will be responsible for the network infrastructure and billing issues for Correios. EuTV is required to cover at least 50% of Brazilian municipalities.

Proposals were evaluated according to the payment offered for the SIM cards, the fees for the sale of top-ups in post offices and fees for selling top-ups in the provider network.

Claro, part of Mexico's América Móvil group, had its bid disqualified.

Correios expects to sign the contract by the end of June and launch the service within the six following months. The company estimates that it will reach 1mn subscribers in the first year of the MVNO operations.

According to the company, postal services from Portugal, France, Germany, Italy and others currently offer similar mobile services.


However, the MVNO comes just as Correios is going through a period of change.

First of all, the company has new management. This Tuesday Brazil's science, tech, innovation and communications minister Gilberto Kassab appointed Guilherme Campos, a federal lawmaker from his party, to be the new Correios president.

Correios used to be subordinated to the extinct communications ministry (MiniCom), which has been merged into the science, technology and innovations (MCTI) ministry.

Correios has also been rumored to be one of the first companies likely to be privatized by the Temer government.

A draft of a document launched by a think-tank linked to the PMDB party and with guidelines for the Temer government speaks of "transferring... to the private sector everything possible in the infrastructure field."