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...