The Brazilian Minister of Communications, Hélio Costa, recently announced plans to present a proposal to President Lula da Silva (pictured above), to provide free mobile phones to almost 12 million citizens. The programme would require an investment of US$1 billion.

The plan would lead to nearly 11.9 million recipients of the social Bolsa Familia programme being given, at no cost, a cell phone. In so doing, Brazil would seek to fulfil two goals: revitalizing the mobile market and reducing the digital gap.

The announcement was handled by the Communications Minister, Hélio Costa, who said last week that he had sent the project plan to the President, who was in favour of the initiative. Private operators would occupy a key role, as they would need to commit to provide the equipment for free. In return, the state would offset the costs through tax credits and tax exemptions.

Each family would receive a cell phone and a toll of 7 reals a month (4 dollars). The Government says that with this plan, companies would be able to expand the mobile phone sector in the country. The phone companies are assuming that they will make money through families exceeding their monthly allowance. The Government intends to dip into its Telecommunications Control Fund to the tune of US$1.1 billion over the next two years.

Brazil has four large companies that manage the mobile phone industry: TIM, Oi, Claro and Vivo, all of which have shown interest in the proposal. ‘Any initiative that benefits the universalization of services is accepted, provided they contemplate the economic sustainability of the sector,’ said a representative of Vivo. TIM said through a statement that they had been discussing the matter with the ministry since September, but added that even the details of the compensatory tax are under discussion. 

However, the opposition party say they are surprised that the plan, which has been mooted for seven years, is only now being forwarded – in the run up to the 2010 elections. ‘I support the extension of phones to people but if the plan is as viable as they say, they should have launched it at least seven years ago. I think the Government should explain whether this is a case of bagging the elections rather than bagging mobile phones,’ said the leader of the PSDB in the Senate, Arthur Virgilio.

Other groups are also opposed. The president of the Commission on Science and Technology of the Chamber of Deputies, Eduardo Gomes, also part of the PSDB, says that Government efforts should focus on the popularization of internet instead.