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Brazil - Telecoms, Mobile, Broadband and Forecasts

Brazil ramps up its telecom services ahead of the 2014 FIFA World Cup

BuddeComm’s yearly update of Brazil - Telecoms, Mobile, Broadband, and Forecasts provides a comprehensive overview of the trends and developments in the telecommunications market of Brazil, including the regulator’s statistics, company data, and other industry indicators to end-2012, as well as estimates for 2013 and expected market developments in the coming years.

Economic climate

For Brazil, 2012 was a disappointing year, with GDP growth well below expectations. The sluggish result has been blamed on the unfavourable global environment. The only sector that grew in 2012 was services; industrial and agricultural activities both shrank. Investments in 2012 were down 3.6% – and yet, paradoxically, domestic consumption rose by 3.1%, buoyed by a general sense of optimism. To revive the economy, President Dilma Rousseff adopted a series of measures to help spur much needed investment.

Investment opportunities

With the upcoming 2014 FIFA World Cup and 2016 Olympic Games being held in Brazil, operators are rushing to roll out new technology such as LTE and FttH networks. The Brazilian government has issued a law offering tax breaks for new telecom investments in networks that support access to fixed or mobile broadband. Companies wishing to secure the tax breaks must submit their network projects to the Communications Ministry by 30 June 2013.

Competition

The asymmetric measures introduced by the General Competition Plan in November 2012 are a significant step in the Brazilian telecom environment. The regulation of network unbundling and controlled wholesale prices should pave the way for a more competitive broadband market. The General Competition Plan requires operators with Significant Market Power (SMP) to share their networks and infrastructure with small or new service providers, at reference prices approved by Anatel.

Fixed/mobile consolidation

Fixed/mobile consolidation is reshaping Brazil’s telecom industry. Telefónica operates through Telefônica Brasil, which has integrated its fixed-line and mobile services under the brand name Vivo, previously only used for its mobile business. The América Móvil group in Brazil comprises long-distance incumbent Embratel, mobile operator Claro, and cable TV provider Net Serviços. The group has started to integrate its fixed and mobile services under the brand name Claro – which likewise was previously used solely for mobile services. Oi offers all fixed line and mobile services under the Oi brand name.

Fixed-line market

Brazil’s fixed-line teledensity is slightly higher than average for South America, and the number of fixed lines continues to grow – but ever so slowly; teledensity has gone up by only one percentage point in six years. The two regional incumbents Oi and Vivo control 43% and 24% 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. While their basic telephony services have been losing customers, the Claro/Embratel/Net group and GVT have been steadily increasing their local market share (respectively to 22% and 8%). GVT is the country’s most successful alternative network provider, offering fixed-line services only.

Mobile market

Brazil is home to more than one third of all mobile users in Latin America and the Caribbean. Mobile penetration is upward of 132% and still growing. Thanks to the rules attached to the 3G licences auctioned in December 2007, which required operators to extend services to all towns and municipalities with no mobile coverage, Brazil managed to achieve mobile coverage of all its 5,565 municipalities in December 2012. Four companies dominate the country’s mobile telecom market: Vivo, Claro, Oi, and Telecom Italia’s TIM Brasil. Together, these four operators control 97% of the country’s mobile subscriber base. Vivo is the leader, TIM Brasil and Claro compete neck-and-neck for second place, and Oi is fourth.

Broadband market

In preparation for the FIFA World Cup and Olympic Games, substantial investments and regulatory reforms are being implemented to boost Brazil’s broadband development – such as the General Competition Plan and the National Broadband Plan. Also, the Atlantic Cable System (ACSea), when completed, should substantially increase bandwidth and reduce broadband prices. Oi is Brazil’s leading broadband network operator, closely followed by Net; Vivo is in third place, and GVT is fourth. Oi and Vivo, which use mainly ADSL technology, have been losing market share to Net and GVT, which offer faster connections – the first over HFC cable, and the second over a NGN network with a Fibre-to-the-Cabinet architecture.

Broadcasting

Since 1996, Brazil’s pay TV market has experienced sustained growth, not even slowing down during the global credit crunch of 2008/09. Although Brazil has the largest number of pay TV subscribers in Latin America, its pay TV penetration lags behind other major countries such as Argentina, Chile, Venezuela, Mexico, and Colombia. There is therefore ample room for growth, and investors have been eager to gain a foothold in the market, especially since the pay TV law of 2011 removed restrictions on foreign investment and on telcos being able to provide pay TV services.

Market highlights:

To tackle the problem of insufficient bandwidth, the Brazilian government has entrusted state-owned Telebrás with the construction of a new submarine cable network – the Atlantic Cable System (ACSea) – linking Brazil with the USA, Europe, Africa, and several Latin American countries. The ACSea submarine cable will increase bandwidth and reduce broadband prices for all of Latin America.

Brazil’s incipient MVNO market has attracted a great deal of interest from national and international investors. The most significant MVNO operator with plans to enter Brazil is Virgin Mobile, but its service launch, scheduled for the second half of 2013, may be delayed due to bureaucratic complications and difficulties in reaching MVNO agreements with mobile network operators.

Vivo, Claro, TIM Brasil, and Oi have won 4G licences and are deploying LTE networks. The government is keen for Brazil to have LTE services available for the FIFA World Cup. Claro was the first of the mobile operators to launch commercial LTE services, in December 2012.

Smartphone penetration in Brazil is slightly lower than the estimated world average, but sales are expected to soar in 2013, partly thanks to a tax break introduced by the government at the start of the year, which should help lower the average selling price of smartphone handsets.

In preparation for the World Cup, Hispasat has launched Amazonas-3, a satellite equipped with 33 Ku-band and 19 C-band transponders, as well as nine Ka-band spot beams. Amazonas-3 has been built to transport higher capacity telecom data than any other satellite in the region.

Although GVT has garnered an excellent reputation and has been performing extremely well financially and operationally, its parent company Vivendi has been trying to sell it – and GVT’s future will depend on the outcome of the sale – if it materialises.

This report is essential reading for those needing high-level strategic information and objective analysis on the telecom sector in Brazil.

It provides further information on:

Regulatory environment;
Economic trend and its impact on telecommunications;
Telecoms operators – consolidations, acquisitions, new licences;
Company performances and ARPU statistics;
Analyses of Brazil’s broadband and mobile sectors;
Spectrum auctions and regulatory issues;
3G and 4G developments, including HSPA and LTE technologies;
Historical and current subscriber statistics and forecasts.

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


  • EXECUTIVE SUMMARY
  • KEY STATISTICS
    • Table Country statistics - 2013
    • Table Telephone network statistics - 2013
    • Table Internet user statistics - 2013
    • Table Broadband statistics - 2013
    • Table Mobile statistics - 2013
    • Table National telecommunications authority
  • TELECOMMUNICATIONS MARKET
    • COUNTRY OVERVIEW
      • Economic background
        • Table Evolution of GDP in Brazil - 2000 - 2013
      • GDP growth
      • Outlook
    • OVERVIEW OF BRAZIL'S TELECOM MARKET
      • Table Fixed and mobile market share - 1997 - 2013
    • MARKET ANALYSIS - 2013
      • Table Telecommunications revenue - 2000 - 2013
      • Table Telecom revenue by segment - 2000 - 2013
      • Table Telecommunications investment - 2000 - 2013
      • Table Telecom investment by segment - 2000 - 2013
    • MARKET OUTLOOK - SHORT TO LONG TERM
  • REGULATORY ENVIRONMENT
    • REGULATORY DEVELOPMENTS
    • GENERAL PLAN FOR UPDATING TELECOM REGULATIONS (PGR)
    • REGULATORY AUTHORITY
      • Anatel
    • PRIVATISATION OF TELEBRÁS
    • MIRROR COMPANIES
    • TELECOM SECTOR LIBERALISATION IN BRAZIL
    • GENERAL COMPETITION PLAN
    • CONCESSIONS AND AUTHORISATIONS
    • UNIVERSAL SERVICE GOALS
    • GOVERNMENT TELECOM FUNDS (FUST, FISTEL, AND FUNTTEL)
    • FOREIGN INVESTMENT
    • NUMBER PORTABILITY
    • ACCESS
    • INTERCONNECTION
    • FIXED-LINE CONTRACT RENEWAL - 2006
    • FIXED-LINE CONTRACT RENEWAL - 2011
    • MOBILE CONSUMER RIGHTS
    • TAXES AND TAX EXEMPTIONS
  • FIXED NETWORK MARKET
    • OVERVIEW OF FIXED NETWORK MARKET
      • Table Fixed lines in service - operators' market share - 2006 - 2013
    • OI (TELEMAR)
      • Table Oi (Telemar) group at a glance
      • Table Oi - fixed lines in service - 1999 - 2013
      • Shareholders
      • Acquisition of Brasil Telecom
      • Oi - outlook
    • VIVO (TELEFÔNICA BRASIL)
      • Table Telefônica Brasil (trading as Vivo) at a glance
      • Table Vivo - fixed lines in service - 1999 - 2013
      • Acquisition of TVA
      • Telesp-Vivo merger
    • EMBRATEL
      • Table Embratel at a glance
      • Table Embratel - fixed lines in service - 2006 - 2013
      • Shareholders
      • Acquisition of Vésper
      • Acquisition of Net
    • GVT
      • Table GVT at a glance
      • Table GVT - fixed lines in service - 2006 - 2013
      • Shareholders
      • Vivendi's decision to sell GVT
    • TIM BRASIL
      • Intelig Telecom
    • CTBC/ALGAR TELECOM
    • SERCOMTEL
  • TELECOMMUNICATIONS INFRASTRUCTURE
    • NATIONAL TELECOM NETWORK
      • Fixed-line statistics
        • Table Fixed lines in service and teledensity - 1995 - 2013
      • Public payphones
        • Table Public payphones - 1996 - 2013
    • INTERNATIONAL INFRASTRUCTURE
      • Submarine cable networks
        • Table Atlantic Cable System - planned
      • Satellite networks
        • Table Geostationary satellites operating in Brazil - 2013
    • INFRASTRUCTURE DEVELOPMENTS
      • IP and voice over internetprotocol (VoIP)
      • Very small aperture terminal (VSAT) networks
    • WHOLESALE
      • Table Vivo- wholesale accesses - 2005 - 2012
  • BROADBAND MARKET
    • OVERVIEW
      • Broadband statistics
        • Table Internet users and penetration -1998 - 2013
        • Table Fixed broadband subscribers and penetration - 2001 - 2013
        • Table Broadband market share by technology - 2002 - 2013
      • Broadband market analysis
      • Digital inclusion and GESAC
    • NATIONAL BROADBAND PLAN
      • Inception
      • Network
      • Goals and realisations
      • Major participating operators
      • Price and speed
    • BRAZIL'S ISP MARKET
      • Overview
      • Universo Online (UOL)
    • BROADBAND NETWORK OPERATORS
      • Market share statistics
        • Table Broadband operators' market share - 2003 - 2013
      • Oi Velox
        • Table Oi - broadband subscribers - 2001 - 2013
      • Net Vírtua
        • Table Net - broadband subscribers - 2001 - 2013
      • Vivo Speedy
        • Table Vivo - broadband subscribers - 2001 - 2013
      • Power GVT
        • Table GVT - broadband subscribers - 2004 - 2013
      • TIM Brasil
    • CABLE MODEMS
      • Table Cable modem subscribers and penetration - 2001 - 2013
    • ASYMMETRICAL DIGITAL SUBSCRIBER LINE (ADSL)
      • Table ADSL subscribers and penetration - 2001 - 2013
    • FIBRE-TO-THE-HOME (FTTH) NETWORKS
    • BROADBAND POWERLINE (BPL)
    • FIXED WIRELESS BROADBAND
      • WiFi
      • WiMAX
      • TDD-LTE
    • MEDIA CONVERGENCE
      • Overview of media convergence
      • Broadband TV (IPTV)
  • DIGITAL MEDIA / DIGITAL ECONOMY
    • DIGITAL ECONOMY
      • E-commerce
        • Table Brazil - B2C e-commerce spending - 2005 - 2013
      • S-commerce
      • E-government
      • E-health
      • E-learning
      • Online games
      • Smart meters/smart grids
    • DIGITAL MEDIA
      • Overview
    • BROADCASTING MARKET
      • Pay TV overview
        • Table Pay TV operators by technology - 2012
        • Table Pay TV subscribers and penetration - 1998 - 2013
        • Table Pay TV market share by technology - 1998 - 2013
      • Regulatory issues
      • Pay TV players
        • Table Pay TV operators - market share - 2000 - 2013
        • Table Net Serviços de Comunicaçao at a glance
        • Table Net Serviços - cable TV subscribers - 2000 - 2013
      • Cable TV
        • Table Cable TV subscribers and penetration - 1998 - 2013
      • Multichannel multipoint distribution systems (MMDS)
        • Table MMDS subscribers and penetration - 1998 - 2013
      • Satellite-based digital pay TV developments
        • Table DTH subscribers and penetration - 1998 - 2013
      • Digital terrestrial TV (DTTV)
  • MOBILE COMMUNICATIONS
    • OVERVIEW OF BRAZIL'S MOBILE MARKET
      • Table World's six largest mobile markets - 2012
      • Mobile statistics
        • Table Mobile subscribers and penetration rate - 1997 - 2013
      • Average revenue per user (ARPU)
        • Table Evolution of mobile ARPU in Brazil - major operators - 2009 - 2012
    • REGULATORY ISSUES
      • Number portability (NP)
      • Mobile spectrum allocation and concession areas
        • Table Subdivision of Brazil into regions and areas
        • Table H-band for 3G services - lots, areas, and spectrum winners
        • Table Bands for 4G services - blocks, winners, and price/MHz/population
      • Mobile Virtual Network Operators (MVNO)
    • MOBILE TECHNOLOGIES
      • Mobile generations
        • Table Mobile market share by technology - 2004 - 2013
        • Table 3G subscribers and penetration - 2008 - 2013
      • Mobile handsets/smartphones
      • Femtocells
    • MOBILE VOICE SERVICES
      • Prepaid cards
        • Table Mobile prepaid/postpaid ratio - 2003 - 2013
    • MOBILE MESSAGING
      • Short message service (SMS)
    • MOBILE BROADBAND
      • Table Mobile broadband subscribers and penetration - 2008 - 2013
      • Table Fixed and mobile broadband market share - 2008 - 2013
    • MOBILE CONTENT AND APPLICATIONS
      • M-banking
      • M-commerce
      • Mobile games
    • MOBILE SATELLITE
    • MOBILE OPERATORS IN BRAZIL
      • Overview
        • Table Mobile operators' market share - 2002 - 2013
        • Table 3G services - operators' market share - 2009 - 2013
        • Table 3G services (phone & broadband) - operators' annual growth - 2010 - 2013
        • Table Subdivision of Brazil into regions and areas for mobile licensing
      • Vivo (Telefônica Brasil)
        • Table Telefônica Brasil (trading as Vivo) at a glance
        • Table Vivo - mobile subscribers - 2002 - 2013
        • Table Vivo/Telemig- mobile subscribers - 2002 - 2007 (historical)
        • Table Vivo - concessions
      • TIM Brasil
        • Table TIM Brasil at a glance
        • Table TIM Brasil - mobile subscribers - 2002 - 2013
        • Table TIM Brasil - concession awards for frequency bands A, B, D, E
      • Claro
        • Table Claro Brasil at a glance
        • Table Claro - mobile subscribers - 2002 - 2013
        • Table Claro - concessions
      • Oi
        • Table Oi (TNL PCS) at a glance
        • Table Oi - mobile subscribers - 2002 - 2013
        • Table Oi/Amazônia/BrT - mobile subscribers -2002 - 2008 (historical)
        • Table Oi - concession awards for frequency bands A, D, E, M
      • Nextel Brasil
        • Table Nextel - mobile subscribers - 2002 - 2013
      • Algar/CTBC Telecom
        • Table CTBC - mobile subscribers - 2003 - 2013
      • Sercomtel Celular
        • Table Sercomtel - mobile subscribers - 2003 - 2013
      • Unicel/Aeiou (defunct)
    • MOBILE VIRTUAL NETWORK OPERATORS (MVNO)
      • Overview
      • Porto Seguro
      • Datora (Sermatel)
      • Virgin Mobile
  • FORECASTS
    • FORECASTS - FIXED-LINE MARKET 2015; 2020
      • higher fixed line growth
        • Table Forecast fixed lines - higher growth scenario - 2015; 2020
      • lower fixed-line growth
        • Table Forecast fixed lines - lower growth scenario - 2015; 2020
    • FORECASTS - FIXED BROADBAND MARKET 2015; 2020
      • higher broadband growth
        • Table Forecast broadband subscribers - higher growth scenario - 2015; 2020
      • lower broadband growth
        • Table Forecast broadband subscribers - lower growth scenario - 2015; 2020
    • FORECASTS - MOBILE MARKET 2015; 2020
      • higher mobile market growth
        • Table Forecast mobile subscribers - higher growth scenario - 2015; 2020
      • lower mobile market growth
        • Table Forecast mobile subscribers - lower growth scenario - 2015; 2020
    • NOTES ON SCENARIO FORECASTS

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