Brazil - Fixed-Line Operators

Synopsis

The Brazilian telecom sector is fully open to competition and continues to attract operators. The bulk of the market, however, remains divided between three groups: Spain’s Telefónica, Mexico’s América Móvil, and Oi, controlled by Brazilian investors and Portugal Telecom. Telefónica operates through Telefônica Brasil, which offers both fixed-line and mobile services (the latter branded Vivo); América Móvil operates through Embratel (fixed line) and through Claro (mobile); and Oi offers fixed line and mobile services under the Oi brand name.

The fixed-line market leaders are the two regional incumbents Oi and Telefônica Brasil, with 45% and 26% respectively of the country’s fixed lines in service, but they mostly keep to their own regions of operations despite the lifting of geographical restrictions. Nevertheless, while their basic telephony service stagnates or dwindles, long-distance incumbent Embratel and Vivendi’s GVT have been steadily increasing their local market share (respectively to 19% and 6%).

Telefônica Brasil’s previous corporate name, Telecomunicaçoes de São Paulo (Telesp), was changed to Telefônica Brasil in October 2011, when the operator completed a restructuring process after buying out Portugal Telecom’s half of mobile operator Vivo Participações and incorporating it into Telesp. The name Vivo was retained as a trademark for mobile business and would be adopted by the company’s fixed-line operations in March 2012.

This report profiles all major and some minor fixed-line operators, providing relevant statistics and analyses.

Key developments:

Oi and Telefônica Brasil see their fixed lines in service shrink by 6.5% and 1.9% respectively while Embratel’s increase by an estimated 21% and GVT’s shoot up by 34%; Telefônica Brasil has been undergoing a company restructure to consolidate fixed and mobile services under the Vivo brand name; Embratel has taken control of cable TV operator Net Serviços de Comunicação.

Companies covered in this report include:

Oi, Telefônica Brasil, Embratel, GVT, TIM Brasil, Intelig, CTBC/Algar Telecom, Sercomtel.

Table of Contents

• 1. Synopsis
• 2. Fixed network operators in Brazil
  • 2.1 Overview of fixed network market
  • 2.2 Oi (Telemar)
    • 2.2.1 Oi - Brasil Telecom merger
  • 2.3 Telefônica Brasil
    • 2.3.1 Acquisition of TVA
    • 2.3.2 Telesp-Vivo merger
  • 2.4 Embratel
  • 2.5 GVT
    • 2.5.1 Vivendi’s acquisition of GVT
  • 2.6 TIM Brasil
    • 2.6.1 Intelig Telecom
  • 2.7 CTBC/Algar Telecom
  • 2.8 Sercomtel
• 3. Related reports

• Table 1 – Fixed lines in service – operators’ market share – 1999 - 2012
• Table 2 – Oi – fixed lines in service – 1999 - 2012
• Table 3 – Telefônica Brasil – fixed lines in service – 1999 - 2012
• Table 4 – Embratel – fixed lines in service – 2007 - 2012
• Table 5 – GVT – fixed lines in service – 2007 - 2012

• Chart 1 – Fixed line market share at a glance – 2011 (Sep)

• Exhibit 1 – Regions and states of Brazil
• Exhibit 2 – Oi (Telemar) group at a glance
• Exhibit 3 – Telefônica Brasil at a glance
• Exhibit 4 – Telesp company history
• Exhibit 5 – Embratel at a glance
• Exhibit 6 – Embratel and Embrapar – principal subsidiaries – February 2012
• Exhibit 7 – GVT at a glance