Algar’s tax repayment to be spent on fibre networks, says Brazil’s regulator

Algar’s tax repayment to be spent on fibre networks, says Brazil’s regulator

In what may seem an unusual regulatory decision, Anatel, the Brazilian regulator, has ruled that telecommunications company Algar Telecom must build 1,670 kilometres of fibre transport networks after receiving some of its tax payments back.

In fact this decision relates to a 2017 supreme court ruling that telecom operators were overpaying taxes and should be reimbursed. However, Anatel’s understanding seems to be that these tax repayments, particularly from fixed telephony concession companies, should be shared with customers.

As business intelligence platform BNamericas explains, Anatel’s belief that the reimbursement should be employed in this way is based on an article of the country's general telecoms law establishing full transfer to users of economic gains obtained via court decisions.

In the case of Algar, Anatel has decided that the company must build a network with capacity of at least 1Gbps.

The company will be able to choose the routes for the networks, provided they connect municipalities and localities currently lacking such infrastructure. There is no deadline for the start of construction.

Algar Telecom already operates a 122,000 kilometre fibre optic network in the country, connecting more than 370 cities.

This move on Anatel’s part isn’t unprecedented, however. A similar decision was taken by the agency regarding Telefonica Brasil in late 2023.

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