2009 Brazil - Telecoms, Mobile, Broadband and Forecasts

BuddeComm’s annual publication, Brazil - Telecoms, Mobile, Broadband and Forecasts, profiles the largest market in Latin America and the region’s leading investment destination for international operators and suppliers. 

In fact, Brazil ranks fifth in the world both in terms of land area and population. It is one of the key emerging markets, and is Latin America’s leading investment destination for international operators and suppliers, together with Russia, India, and China; these four economies, collectively nicknamed BRIC, are forecast to dominate world economy by the middle of the twenty-first century. 

Brazil’s telecom sector has been fully liberalised; there are no restrictions on foreign telecom capital except for cable TV. Competition is encouraged by the government. Mobile telephony is the strongest telecom market, with fixed-to-mobile substitution leaving the fixed-line sector stagnant despite low teledensity. Brazil holds almost one third of all mobile users in Latin America. Mobile penetration is lower than the regional average, and the mobile market is expected to continue to grow despite the financial crisis. 

This report presents a concise overview of sector liberalisation and privatisation in Brazil; government initiatives and regulations in the telecom industry; company profiles for the major operators in the various telecom sectors; the development of mobile and broadband technologies; the emergence of convergence and IP solutions; essential country and operator statistics in all telecom sectors; and scenario forecasts for the fixed-line, mobile, and broadband markets. 

Key highlights:

·         In Brazil’s liberalised fixed-line market, the incumbents continue to dominate the infrastructure but are slowly losing market share to smaller operators. Although slightly higher than average for Latin America, teledensity is only 21%, yet the fixed-line market remains stagnant.

·         Mobile penetration exceeds 73%, and the mobile market continues to post double-digit growth.

·         Four companies dominate the Brazilian mobile phone market: Vivo (Telefónica/Portugal Telecom), Claro (América Móvil), TIM Brasil (Telecom Italia), and Oi/Brasil Telecom (locally owned). Together, these four control 98.5% of Brazil’s mobile subscriber base.

·         Compared with other economic indicators, Brazil’s Internet penetration is lower than expected, and there is considerable room for growth.

·         Meanwhile, broadband uptake has been stifled by high prices and weak competition.

·         Although regulatory issues still await resolution, both pay TV and telephone companies have been active in developing convergence strategies, with several operators offering triple or quadruple play packages.

Brazil – Key telecoms statistics – September 2008

(Source: BuddeComm based on industry sources)

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

Data in this report is the latest available at the time of preparation and may not be for the current year.

For those needing high-level strategic information and objective analysis on this region, this 140+ page report is essential reading and gives further information on:

·         Regulatory developments and spectrum auctions;

·         Fixed-line developments, including the adoption of alternative technologies such as VoIP;

·         Mobile telephony growth and the uptake of mobile data services;

·         Broadband growth and incursions into wireless technologies such as WiMAX;

·         Convergence, triple play, high definition TV, IPTV, and other emerging technologies;

·         Scenario forecasts for the fixed line, mobile, and broadband markets. 

Brazil’s telecom market is expected to go on growing despite the recession, although growth will likely slow down – in some areas more than others. The sector has been fully liberalised; there are no restrictions on foreign telecom capital except for cable TV. Competition is encouraged by the government. Mobile telephony is the strongest telecom market, with fixed-to-mobile substitution leaving the fixed-line sector stagnant despite low teledensity. Brazil holds almost one third of all mobile users in Latin America. The broadband sector, on the other hand, has been held back by weak competition.