BMI View: We have not made significant changes to our forecasts this quarter as the market performs inline with our core views. SIM deactivations will keep pressure on the market, incurring significant losses.
Our outlook for the next five years remains stable, with growth in 3G/4G uptake. Operators' monetisationefforts will be bolstered by Brazil's improving economic growth prospects. Despite this, political riskassociated with corruption allegations continue to pose downside risk for policy continuity in the sector.
While operators deactivating SIMs will reflect in an apparent contraction of mobile subscriptions, webelieve LTE expansion will drive efforts for 3G/4G migration, as we expect LTE uptake to follow a similartrend to 3G.
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More than 13.7mn inactive mobile users were shed in 2016 and an additional 2.13mn in H117. Moreaccurate data will enable operators to plan service and network upgrades more effectively and loweroperating costs. 3G/4G migration will be a growth driver through to 2021, by which time there will beover 214mn 3G/4G subscribers in the market.