Spanish Prisoner

Spanish Prisoner – Brief Article

Jack Epstein

TELEFONICA, THE WORLD’S TENTH-LARGEST TELECOMMUNICAtions company, thought it had hit the jackpot last year after paying US$4.9 billion for Sao Paulo’s Telesp, which handles 40% of Brazil’s phone calls. But the Spanish company has become a prisoner of its own gaffes.

Blunder #1: At the company’s first press conference, officials addressed the Brazilian media in Spanish, causing many offended journalists to fold up their notebooks and walk out.

Blunders #2-5: In its rush to add more than 2 million more phone lines to Sao Paulo’s five million existing lines, it disrupted service to many homes after replacing old cables. It also sent bills to wrong addresses, changed many customers’ numbers without prior notice and pulled recordings that notified callers of the change after 30 days rather than the usual 60 days.

In response, irate consumers made thousands of formal complaints to watchdog agencies and created two “I hate Telefonica” web sites.

Latest blunder: In early July, when consumers began choosing among competing long-distance and international carriers, chaos ruled. Less than one in three long-distance calls were completed in the first week of service. Telefonica executives blamed Embratel, the long-distance carrier bought by MCI WorldCom. But the National Telecommunications Agency (ANATEL), the state regulatory agency, disagreed, fining both companies as much as $17 million each for the long distance collapse, according to several press reports.

To repair its image, Telefonica has since tried to win back customers with a multimillion dollar television campaign led by two soap opera stars and a middle-aged rocker. In several TV spots, actor Jose Mayer, who specializes in romantic roles, tells consumers that Telefonica is investing millions to improve service in the long run.

Telefonica hopes that Mayer and the others can keep customers from jumping to Megatel, the new local access competitor owned by Bell Canada, Qualcomm and WLL International. Megatel opens for business at the end of the year.

COPYRIGHT 1999 Freedom Magazines, Inc.

COPYRIGHT 2000 Gale Group