Lessons from the Brazilian Telecommunications Holding Company

Introduction Much of what has been called in the Economics literature “natural” monopolies is now evolving into varying forms of open competition. Such development raises interesting questions for pricing, appropriate extent of deregulation, and in particular the use of market information by different stakeholders. Monopolies that depend on legislation to be sustainable, whenever deregulated, will face competitors that have at least as much technology and resources as the incumbent. This is the case with telecommunication companies in most third world countries[1], typically saddled with old infrastructure and lacking access to the capital needed to update it. Moreover, under the incumbent’s perspective, one of the problems in the deregulation process is the need to face a competitive environment incompatible with the older company culture where concern with potential competitors was nonexistent. In this paper we analyze the impact of monopoly deregulation on the organizational information needs of Telebrás, the holding company of the telecommunication arm of the Brazilian Postal Telephone and Telegraph (PTT) system. We suggest that monopolies on the verge of deregulation may take advantage of competitive intelligence tools to more effectively vie for a strong position in the marketplace. Deregulation in Brazil was still unfolding as this paper was written; therefore the description is as complete as possible at this time. In the next section we will present a brief discussion of the issues surrounding state owned monopoly deregulation. This will help us understand the changes in information needs of Telebrás as it is deregulated. Expectations