Brazilian WiMax Markets

Increasing Investment in Wireless Technologies by Telecom Operators will Drive Potential for WiMax in Brazil

Although worldwide interoperability for microwave access (WiMax) products have not been officially launched in Brazil, they have already created high expectations, thereby securing high revenue and growth potential for the Brazilian WiMax markets. The focus of the Brazilian wireless market changed with the arrival of several mobile operators in 2002. Large investments in mobile technologies such as global system mobile (GSM), code-division multiple access (CDMA), and time division multiaccess (TDMA) were accomplished and wireless point-to-point (PTP) technologies to interconnect base stations were deployed. In addition, several small-sized companies entered the Internet broadband access market, focusing almost exclusively on residential and commercial buildings with fixed wireless access (FWA) solutions in open frequencies (2.4 GHz). WiMax is seen as the ideal solution to meet the needs of Brazilian telecom operators by catering to the country’s growing broadband market.

This Frost & Sullivan study measures the addressable markets for WiMax services in the medium and long term and analyses the level of investments as well as the pay-off in different classes of Brazilian cities. For the purpose of this study, Brazilian cities are grouped into three categories (A, B, and C) based on the first and second quintiles’ total income. Type A cities (60 cities) are those with income more than $102 million, type B cities (720 cities) have income from $7 to $102 million, and type C cities (4702 cities) have income up to $7 million. It also identifies potential adopters of WiMax and operators that are likely to migrate to this technology.

Uncompetitive Existing Technologies and Need to Streamline Wireless Transmission Expected to Boost Uptake

"As the Brazilian broadband markets develop, digital subscriber line (DSL), cable modem, and broadband wireless access (BWA) providers realize they cannot reach the entire addressable market or trigger a face-to-face competition with the sector’s giants," notes the analyst of this study. "With this in mind, some of the most important telecom operators of the country have begun arranging their operations for WiMax deployments by acquiring licensed frequencies or moving directly to pilot tests."

In addition, the reach of fixed line operators’ infrastructure does not address the entire potential market and, therefore, the choice would be to rollout WiMax networks in those regions where traditional wire networks would not pay off. Besides, fixed line operators can replace their existing wireless local loop (WLL) networks that do not allow broadband Internet access with WLL networks with WiMax. Perceiving large opportunities for these markets in the offing, some vendors even have plans to manufacture WiMax equipment locally.

Expansion of Networks and Reducing Costs of Wireless Equipment Create Opportunities for WiMax from Broadband Access Providers

Despite reduced CAPEX due to over-investment in the telecommunications sector and the shrinking of the residential market due to high cost of customer premise equipment (CPE), the Brazilian WiMax markets are likely to exhibit healthy growth.

"Telecom operators are expected to adopt strategies such as setting up start-ups in strategic cities, initiating direct competition with portable broadband solutions, and expanding broadband services’ coverage to close any flank," explains the analyst. "WiMax is a viable solution to BWA providers and mobile operators, with the former shifting focus from the residential and business markets and expanding their services to less vertical sites and the latter building transmission networks as interconnection rates tend to become more expensive."