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Brazil - Telecoms, Mobile, Broadband and Forecasts

Brazil - Telecoms, Mobile, Broadband and Forecasts

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Price $995.00
Meta Description The outlook is bright for Brazil’s telecom marketWith about one third of the region’s population, Brazil is Latin America’s
Publisher BuddeComm
Date of Report Jun 22, 2011
Quick Overview
The outlook is bright for Brazil’s telecom marketWith about one third of the region’s population, Brazil is Latin America’s largest telecom market and the region’s leading investment destination for international operators and suppliers.
With the spending power of Brazilian consumers on the rise as well as the upcoming 2014 FIFA World Cup and 2016 Olympics, both being hosted in Brazil, we can expect strong demand for fixed and mobile broadband, mobile telephony, and other wireless products such as smart phones and mobile applications.
Brazil’s mobile market is the fifth largest in the world. Though penetration has passed the 100% mark, the number of subscribers continues to grow, with many Brazilians having more than one SIM card. On the other hand, the widespread ownership of multiple SIM cards pushes up penetration figures and hides the fact that many Brazilians – more than one out of four – have no mobile phone at all.
Due to robust competition, multiple accounts, and a high proportion of prepaid customers, mobile ARPU in Brazil is behind the world average. It may decrease further with the advent of mobile virtual network operators, since regulations approved in November 2010 allow companies such as banks and retailers to offer mobile virtual network operator services.
Mobile operators are looking to shore up their ARPU rates by boosting mobile data revenues. The growth of 3G in Brazil has been nothing but spectacular. The number of WCDMA subscriptions (including both 3G handsets and mobile broadband) soared from less than 2,000 in 2008 to 24.4 million in March 2011.
It should be noted that mobile broadband does not necessarily replace fixed broadband; many Brazilians use the first with their laptop and the second with their PC. However, there are parts of Brazil where fixed broadband does not reach, and where mobile broadband is the only option.
In terms of fixed broadband subscribers, Brazil is the regional leader and one of the top countries in the world, ranking ninth globally. In terms of fixed broadband penetration, however, Brazil is only slightly above the Latin American average, trailing behind neighbouring Chile, Argentina, and Uruguay.
With a promising economic outlook and rising prosperity, demand for broadband in Brazil is expected to soar. Fixed broadband plans on offer have improved significantly in recent times, so much so that broadband prices in Brazil are lower than in most other Latin American countries.
However, they are still high compared with developed markets, and they remain expensive for the Brazilian socio-economic environment. Likewise, in terms of broadband speeds, Brazil performs well compared with Latin America, but poorly compared with the rest of the world.
While Brazil’s mobile and broadband subscribers continue to increase, the fixed-line sector has been stagnating since 2002. Fixed-line rentals are expensive compared with other countries, and a large percentage of Brazilians cannot afford a fixed telephone. Brazil’s teledensity is only 21% – and yet, in a region where fixed lines are scarce, it is about 23% higher than the Latin American average.
The Brazilian telecom sector is fully open to competition. But while the number of licensed companies increases, the bulk of the market is divided between three groups: (1) Spain’s Telefónica, which owns Telesp (fixed line) and Vivo (mobile); (2) Mexico’s América Móvil, which owns Embratel (fixed line) and Claro (mobile); and (3) Oi (fixed line and mobile), which is controlled by Brazilian investors and Portugal Telecom.
The fixed-line market leaders are the two regional incumbents Oi and Telesp, with 48% and 27% 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.
However, while their basic telephony service stagnates or dwindles, two other companies – long-distance incumbent Embratel and Vivendi’s GVT – have gained a rapidly increasing market share of 18% and 5% respectively.
Four companies dominate Brazil’s mobile telecom market: Vivo, Claro, Oi, and Telecom Italia’s TIM Brasil. Together, these four operators control 98% of the country’s mobile subscriber base. Vivo is the leader, with about 29% of the market; Claro and TIM Brasil vie for second and third place, with 25% each; Oi is fourth, with 19%. The remaining 2% of the market is shared between CTBC Telecom, Sercomtel, and Nextel Brasil.
The principal operators in Brazil’s pay TV market are Net Serviços, Sky Brasil, Embratel, Telesp, and Oi TV. Net Serviços, the largest multi-service cable provider in Latin America, is controlled by local media group Globo, although Embratel owns a majority of the company’s stock.
Sky Brasil, the largest High Definition satellite TV operator in Latin America, is controlled by DirecTV and has Globo as a minority shareholder. Independently of Net Serviços, Embratel provides satellite TV services branded Via Embratel. Besides Embratel, another two fixed-line incumbents compete with Sky Brasil in the satellite TV market – Telesp and Oi.
Because of remoteness problems, Brazil is very active in the satellite sector. Three companies operate national satellites: Embratel’s Star One, Telesat Brasil, and Hispamar. Star One was the first operator to provide satellite services in Brazil, and remains the market leader.
Market highlights:
The government has developed a National Broadband Plan, aimed at providing broadband access for low-income households and in areas where private operators have no commercial interest.

The new concession contracts for incumbent operators, effective from 2011 to 2015, contain an important change: the elimination of a clause that prohibits fixed-line telephone operators from offering pay TV services on their networks.
The government is keen to see the deployment of 4G/LTE before the 2014 FIFA World Cup. Spectrum is being reallocated for this purpose, and an auction is scheduled for 2012.
Driven by the popularity of social networks, smart phone sales tripled in 2010, but penetration is still low compared with the rest of the world.
Having won 3G licences for almost all of the national territory, iDEN operator Nextel Brasil has contracted Huawei to roll out a UMTS network customised for PTT services.
Operators are consolidating their fixed-line, mobile, broadband, and pay TV operations. Having bought out Vivo’s co-shareholder Portugal Telecom, Telefónica intends to merge Telesp with Vivo, while Carlos Slim’s América Móvil has taken control of Embratel with a view to integrating it with Claro.
After selling its stake in Vivo to Telefónica, Portugal Telecom became a majority shareholder of Oi in March 2011, when it bought about 25% interest in the company.
The launch of Telstar 14R (known as Estrela do Sul 2 in Brazil), scheduled for the second half of 2011, was brought forward to May 2011. The satellite covers 100% of Brazilian territory and can deliver services to the whole of the Americas.Star One C3, scheduled for launch in 2012, will cover all of South America including Brazilian territorial waters.Brazil fixed-line, broadband, and mobile statistics – 2009 - 2011
Sector | 2009 | 2010 | 2011 (e) |
Fixed lines in service |
Total subscribers (million) | 41.50 | 42.14 | 42.80 |
Penetration rate | 21.2% | 21.3% | 21.4% |
Annual growth | 0.6% | 1.6% | 1.6% |
Broadband |
Total subscribers (million) | 11.38 | 13.20 | 14.70 |
Penetration rate | 5.8% | 6.7% | 7.3% |
Annual growth | 14% | 16% | 11% |
Mobile telephony subscribers |
Total subscribers (million) | 173.96 | 202.94 | 232.72 |
Penetration rate | 89% | 103% | 116% |
Annual growth | 15% | 17% | 15% |
(Source: BuddeComm based on industry data)
For those needing an objective and high-level strategic analysis on Brazil, this report is essential reading and gives further information on:

The development of Brazil’s fixed-line, mobile, broadband, and pay TV sectors together with industry outlook and forecasts.
Anatel’s General Plan for Updating Telecom Regulations, known as PGR, which includes lists of actions to be carried out in the short term, medium term, or long term.
Company performance and ARPU.
An analysis of Brazil’s broadband sector.How different scenarios are likely to affect the fixed-line, mobile, and broadband markets in the ten years to 2020.Data in this report is the latest available at the time of preparation and may not be for the current year.
Table of Contents
1. Key Statistics
2. Telecommunications Market
2.1 Country overview
2.1.1 Outlook
2.2 Overview of Brazil’s telecom market
2.3 Market analysis - 2011
3. Regulatory Environment
3.1 Regulatory developments
3.2 General Plan for Updating Telecom Regulations
3.3 Regulatory authority
3.3.1 Anatel
3.4 Privatisation of Telebrás
3.5 Mirror companies
3.6 Telecom sector liberalisation in Brazil
3.7 Concessions and authorisations
3.8 Universal service goals
3.9 Government telecom funds (Fust, Fistel, and Funttel)
3.10 Foreign investment
3.11 Number portability
3.12 Access
3.13 Functional and structural separation
3.14 Interconnection
3.15 Fixed-line contract renewal – 2006
3.16 Fixed-line contract renewal – 2011
4. Fixed Network Operators
4.1 Overview of fixed network market
4.2 Oi (Telemar)
4.2.1 Oi - Brasil Telecom merger
4.3 Telesp
4.3.1 Telesp-Vivo merger
4.4 Embratel
4.5 GVT
4.5.1 Vivendi’s acquisition of GVT
4.6 TIM Brasil
4.6.1 Intelig Telecom
4.7 CTBC/Algar Telecom
4.8 Sercomtel
5. Telecommunications Infrastructure
5.1 National telecom network
5.1.1 Fixed-line statistics
5.1.2 Public payphones
5.2 International infrastructure
5.2.1 Submarine cable networks
5.2.2 Satellite networks
5.3 Infrastructure developments
5.3.1 IP and voice over internet protocol (VoIP)
5.3.2 Very small aperture terminal (VSAT) networks
5.4 Wholesale
6. Broadband Market
6.1 Overview
6.1.1 Broadband statistics
6.1.2 Broadband market analysis
6.1.3 Digital inclusion and GESAC
6.1.4 National broadband plan
6.2 Brazil’s ISP market
6.2.1 Overview
6.2.2 Universo Online (UOL)
6.2.3 Internet Group (iG, iBest, and BrTurbo)
6.2.4 Terra
6.3 Broadband network operators
6.3.1 Telesp (Speedy)
6.3.2 Oi (Velox)
6.3.3 Net Vírtua (Net Serviços de Comunicação)
6.3.4 GVT (Power)
6.4 Cable modems
6.5 Asymmetrical digital subscriber line (ADSL)
6.6 Fibre-to-the-home (FttH) networks
6.7 Broadband powerline (BPL)
6.8 Fixed wireless broadband
6.8.1 WiFi
6.8.2 WiMAX
6.9 Media convergence
6.9.1 Overview of media convergence
6.9.2 Broadband TV (IPTV)
7. Digital Media / Digital Economy
7.1 Digital economy
7.1.1 E-commerce
7.1.2 E-government
7.1.3 E-health
7.1.4 E-learning
7.1.5 Smart meters/smart grids
7.2 Digital media overview
7.3 Broadcasting
7.3.1 Pay TV overview
7.3.2 Regulatory issues
7.3.3 Major pay TV players
7.3.4 Cable TV
7.3.5 Multichannel multipoint distribution systems (MMDS)
7.3.6 Satellite-based digital pay TV developments
7.3.7 Digital terrestrial TV (DTTV)
8. Mobile Communications
8.1 Overview of Brazil’s mobile market
8.1.1 Mobile statistics
8.1.2 Average revenue per user (ARPU)
8.2 Regulatory issues
8.2.1 Number portability (NP)
8.2.2 Mobile spectrum allocation and concession areas
8.2.3 Mobile virtual network operator (MVNO)
8.3 Mobile technologies
8.3.1 Analogue
8.3.2 Second generation (2G) mobile
8.3.3 Third generation (3G) mobile networks (UMTS)
8.3.4 Long-term evolution (LTE)
8.3.5 Mobile handsets/smart phones
8.4 Mobile operators in Brazil
8.4.1 Overview
8.4.2 Vivo
8.4.3 TIM Brasil
8.4.4 Claro
8.4.5 Oi
8.4.6 Nextel Brasil
8.4.7 Algar/CTBC Telecom
8.4.8 Sercomtel Celular
8.4.9 Unicel/Aeiou
8.5 Mobile voice services
8.5.1 Prepaid cards
8.6 Mobile messaging
8.6.1 Short message service (SMS)
8.6.2 Multimedia messaging service (MMS)
8.7 Mobile broadband
8.8 Mobile content and applications
8.8.1 Gaming
8.9 Mobile satellite
9. Forecasts
9.1 Forecasts – fixed-line market 2010; 2015; 2020
9.1.1 Scenario 1 – higher fixed line growth
9.1.2 Scenario 2 – lower fixed-line growth
9.2 Forecasts – fixed broadband market 2010; 2015; 2020
9.2.1 Scenario 1 – higher broadband growth
9.2.2 Scenario 2 – lower broadband growth
9.3 Forecasts – mobile market 2010; 2015; 2020
9.3.1 Scenario 1 – higher mobile market growth
9.3.2 Scenario 2 – lower mobile market growth
10. Glossary of Abbreviations
Table 1 – Country statistics – 2011
Table 2 – Telephone network statistics – 2011
Table 3 – Internet user statistics – 2011
Table 4 – Broadband statistics – 2011
Table 5 – Mobile statistics – 2011
Table 6 – National telecommunications authority
Table 7 – Evolution of GDP in Brazil – 2000 - 2011
Table 8 – Fixed and mobile market share – 1997 - 2011
Table 9 – Telecommunications revenue – 2000 - 2011
Table 10 – Telecom revenue by segment – 2000 - 2011
Table 11 – Telecommunications investment – 2000 - 2011
Table 12 – Telecom investment by segment – 2000 - 2011
Table 13 – Fixed lines in service – operators’ market share – 1999 - 2011
Table 14 – Oi – fixed lines in service – 1999 - 2011
Table 15 – Telesp – fixed lines in service – 1999 - 2011
Table 16 – Embratel – fixed lines in service – 2007 - 2011
Table 17 – GVT – fixed lines in service – 2003 - 2011
Table 18 – Fixed lines in service and teledensity – 1995 - 2011
Table 19 – Public payphones – 1996 - 2011
Table 20 – Net and GVT – VoIP subscribers – 2005 - 2010
Table 21 – Telesp – wholesale accesses – 2005 - 2010
Table 22 – Internet users and penetration – 1996 - 2011
Table 23 – Fixed broadband subscribers and penetration – 2001 - 2011
Table 24 – Broadband market share by technology – 2002 - 2011
Table 25 – UOL – paying subscribers – 2004 - 2011
Table 26 – Broadband operators’ market share – 2003 - 2011
Table 27 – Telesp – broadband subscribers – 2001 - 2011
Table 28 – Oi – broadband subscribers – 2001 - 2011
Table 29 – Net – broadband subscribers – 2001 - 2011
Table 30 – GVT – broadband subscribers – 2004 - 2011
Table 31 – Cable modem subscribers and penetration – 2001 - 2011
Table 32 – ADSL subscribers and penetration – 2001 - 2011
Table 33 – Volume of retail e-commerce – 2005 - 2010
Table 34 – Pay TV operators by technology – 2010
Table 35 – Pay TV subscribers and penetration – 1999 - 2011
Table 36 – Pay TV market share by technology – 1998 - 2011
Table 37 – Pay TV operators – market share – 2000 - 2011
Table 38 – Net Serviços – pay TV subscribers – 2000 - 2011
Table 39 – Cable TV subscribers and penetration – 1998 - 2011
Table 40 – MMDS subscribers and penetration – 1998 - 2011
Table 41 – DTH subscribers and penetration – 1998 - 2011
Table 42 – World’s five largest mobile markets – 2010
Table 43 – Mobile subscribers and penetration rate – 1997 - 2011
Table 44 – Evolution of mobile ARPU in Brazil – major operators – 2007 - 2010
Table 45 – Mobile market share by technology – 2002 - 2011
Table 46 – 3G subscribers and penetration – 2008 - 2011
Table 47 – Mobile operators’ market share – 2002 - 2011
Table 48 – Vivo – mobile subscribers – 2002 - 2011
Table 49 – Vivo/Telemig– mobile subscribers – 2002 - 2007 (historical)
Table 50 – TIM Brasil – mobile subscribers – 2002 - 2011
Table 51 – Claro – mobile subscribers – 2002 - 2011
Table 52 – Oi – mobile subscribers – 2002 - 2011
Table 53 – Oi/Amazônia/BrT – mobile subscribers – 2002 - 2008 (historical)
Table 54 – Nextel – mobile subscribers – 2002 - 2011
Table 55 – CTBC – mobile subscribers – 2003 - 2011
Table 56 – Sercomtel – mobile subscribers – 2003 - 2011
Table 57 – Mobile prepaid/postpaid ratio – 2002 - 2011
Table 58 – Mobile broadband subscribers and penetration – 2008 - 2011
Table 59 – Forecast fixed lines – higher growth scenario – 2010; 2015; 2020
Table 60 – Forecast fixed lines – lower growth scenario – 2010; 2015; 2020
Table 61 – Forecast broadband subscribers – higher growth scenario – 2010; 2015; 2020
Table 62 – Forecast broadband subscribers – lower growth scenario – 2010; 2015; 2020
Table 63 – Forecast mobile subscribers – higher growth scenario – 2010; 2015; 2020
Table 64 – Forecast mobile subscribers – lower growth scenario – 2010; 2015; 2020
Chart 1 – Fixed and mobile subscribers in Brazil – 1997 - 2011
Chart 2 – Fixed and mobile subscribers in Brazil by market share – 1997 - 2011
Chart 3 – Evolution of telecom revenue in Brazil – 2000 - 2011
Chart 4 – Evolution of telecom investment in Brazil – 2000 - 2011
Chart 5 – Fixed line market share at a glance – 2010
Chart 6 – Evolution of fixed lines in service – 1995 - 2011
Chart 7 – Fixed broadband technologies at a glance – 2002 - 2011
Chart 8 – Broadband market share at a glance – 2003 - 2011
Chart 9 – Evolution of pay TV in Brazil – 1998 - 2011
Chart 10 – Pay TV technologies at a glance – 1998 - 2011
Chart 11 – Pay TV operators’ market share at a glance – 2010
Chart 12 – Operators’ mobile ARPU – 2007 - 2010
Chart 13 – Evolution of mobile technologies – 2002 - 2011
Chart 14 – Mobile market share at a glance – 2010
Exhibit 1 – Map of Brazil
Exhibit 2 – Regions and States of Brazil
Exhibit 3 – Oi (Telemar) group at a glance
Exhibit 4 – Telesp at a glance
Exhibit 5 – Embratel at a glance
Exhibit 6 – Embratel and Embrapar – principal subsidiaries – 2011
Exhibit 7 – GVT at a glance
Exhibit 8 – Geostationary satellites operating in Brazil – 2011
Exhibit 9 – UOL at a glance
Exhibit 10 – Net Serviços de Comunicação at a glance
Exhibit 11 – Subdivision of Brazil into regions and areas
Exhibit 12 – H-band for 3G services – lots, areas, and spectrum winners
Exhibit 13 – Vivo at a glance
Exhibit 14 – Vivo – concessions
Exhibit 15 – The uneasy marriage between Telefónica and Portugal Telecom (historical)
Exhibit 16 – TIM Brasil at a glance
Exhibit 17 – TIM Brasil – concession awards for frequency bands A, B, D, E
Exhibit 18 – Claro Brasil at a glance
Exhibit 19 – Claro – concessions
Exhibit 20 – Oi (TNL PCS) at a glance




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