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Brazil - Telecoms, Mobile, Broadband and Forecasts

Published By :

BuddeComm

Published Date : Mar 2013

Category :

Broadband

No. of Pages : 118 Pages


Executive Summary

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.
Table of Contents

1. Key Statistics

2. Telecommunications Market
2.1 Country overview
2.1.1 Economic background
2.1.2 GDP growth
2.1.3 Outlook
2.2 Overview of Brazil’s telecom market
2.3 Market analysis – 2013
2.4 Market outlook - short to long term

3. Regulatory Environment
3.1 Regulatory developments
3.2 General Plan for Updating Telecom Regulations (PGR)
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 General Competition Plan
3.8 Concessions and authorisations
3.9 Universal service goals
3.10 Government telecom funds (Fust, Fistel, and Funttel)
3.11 Foreign investment
3.12 Number portability
3.13 Access
3.14 Interconnection
3.15 Fixed-line contract renewal – 2006
3.16 Fixed-line contract renewal – 2011
3.17 Mobile consumer rights
3.18 Taxes and tax exemptions

4. Fixed Network Market
4.1 Overview of fixed network market
4.2 Oi (Telemar)
4.2.1 Shareholders
4.2.2 Acquisition of Brasil Telecom
4.2.3 Oi - outlook
4.3 Vivo (Telefônica Brasil)
4.3.1 Acquisition of TVA
4.3.2 Telesp-Vivo merger
4.4 Embratel
4.4.1 Shareholders
4.4.2 Acquisition of Vésper
4.4.3 Acquisition of Net
4.5 GVT
4.5.1 Shareholders
4.5.2 Vivendi’s decision to sell 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 internetprotocol (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
6.2 National broadband plan
6.2.1 Inception
6.2.2 Network
6.2.3 Goals and realisations
6.2.4 Major participating operators
6.2.5 Price and speed
6.3 Brazil’s ISP market
6.3.1 Overview
6.3.2 Universo Online (UOL)
6.4 Broadband network operators
6.4.1 Market share statistics
6.4.2 Oi Velox
6.4.3 Net Vírtua
6.4.4 Vivo Speedy
6.4.5 Power GVT
6.4.6 TIM Brasil
6.5 Cable modems
6.6 Asymmetrical digital subscriber line (ADSL)
6.7 Fibre-to-the-home (FttH) networks
6.8 Broadband Powerline (BPL)
6.9 Fixed wireless broadband
6.9.1 WiFi
6.9.2 WiMAX
6.9.3 TDD-LTE
6.10 Media convergence
6.10.1 Overview of media convergence
6.10.2 Broadband TV (IPTV)

7. Digital Media / Digital Economy
7.1 Digital economy
7.1.1 E-commerce
7.1.2 S-commerce
7.1.3 E-government
7.1.4 E-health
7.1.5 E-learning
7.1.6 Online games
7.1.7 Smart meters/smart grids
7.2 Digital media
7.2.1 Overview
7.3 Broadcasting market
7.3.1 Pay TV overview
7.3.2 Regulatory issues
7.3.3 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 Operators (MVNO)
8.3 Mobile technologies
8.3.1 Mobile generations
8.3.2 Mobile handsets/smartphones
8.3.3 Femtocells
8.4 Mobile voice services
8.4.1 Prepaid cards
8.5 Mobile messaging
8.5.1 Short message service (SMS)
8.6 Mobile broadband
8.7 Mobile content and applications
8.7.1 M-banking
8.7.2 M-commerce
8.7.3 Mobile games
8.8 Mobile satellite
8.9 Mobile operators in Brazil
8.9.1 Overview
8.9.2 Vivo (Telefônica Brasil)
8.9.3 TIM Brasil
8.9.4 Claro
8.9.5 Oi
8.9.6 Nextel Brasil
8.9.7 Algar/CTBC Telecom
8.9.8 Sercomtel Celular
8.9.9 Unicel/Aeiou (defunct)
8.10 Mobile Virtual Network Operators (MVNO)
8.10.1 Overview
8.10.2 Porto Seguro
8.10.3 Datora (Sermatel)
8.10.4 Virgin Mobile

9. Forecasts
9.1 Forecasts – fixed-line market 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 2015; 2020
9.2.1 Scenario 1 – higher broadband growth
9.2.2 Scenario 2 – lower broadband growth
9.3 Forecasts – mobile market 2015; 2020
9.3.1 Scenario 1 – higher mobile market growth
9.3.2 Scenario 2 – lower mobile market growth
9.4 Notes on scenario forecasts

List of Table


Table 1 – Country statistics – 2013
Table 2 – Telephone network statistics – 2013
Table 3 – Internet user statistics – 2013
Table 4 – Broadband statistics – 2013
Table 5 – Mobile statistics – 2013
Table 6 – National telecommunications authority
Table 7 – Evolution of GDP in Brazil – 2000 - 2013
Table 8 – Fixed and mobile market share – 1997 - 2013
Table 9 – Telecommunications revenue – 2000 - 2013
Table 10 – Telecom revenue by segment – 2000 - 2013
Table 11 – Telecommunications investment – 2000 - 2013
Table 12 – Telecom investment by segment – 2000 - 2013
Table 13 – Fixed lines in service – operators’ market share – 2006 - 2013
Table 14 – Oi – fixed lines in service – 1999 - 2013
Table 15 – Vivo – fixed lines in service – 1999 - 2013
Table 16 – Embratel – fixed lines in service – 2006 - 2013
Table 17 – GVT – fixed lines in service – 2006 - 2013
Table 18 – Fixed lines in service and teledensity – 1995 - 2013
Table 19 – Public payphones – 1996 - 2013
Table 20 – Vivo– wholesale accesses – 2005 - 2012
Table 21 – Internet users and penetration –1998 - 2013
Table 22 – Fixed broadband subscribers and penetration – 2001 - 2013
Table 23 – Broadband market share by technology – 2002 - 2013
Table 24 – Broadband operators’ market share – 2003 - 2013
Table 25 – Oi – broadband subscribers – 2001 - 2013
Table 26 – Net – broadband subscribers – 2001 - 2013
Table 27 – Vivo – broadband subscribers – 2001 - 2013
Table 28 – GVT – broadband subscribers – 2004 - 2013
Table 29 – Cable modem subscribers and penetration – 2001 - 2013
Table 30 – ADSL subscribers and penetration – 2001 - 2013
Table 31 – Brazil – B2C e-commerce spending – 2005 - 2013
Table 32 – Pay TV operators by technology – 2012
Table 33 – Pay TV subscribers and penetration – 1998 - 2013
Table 34 – Pay TV market share by technology – 1998 - 2013
Table 35 – Pay TV operators – market share – 2000 - 2013
Table 36 – Net Serviços – cable TV subscribers – 2000 - 2013
Table 37 – Cable TV subscribers and penetration – 1998 - 2013
Table 38 – MMDS subscribers and penetration – 1998 - 2013
Table 39 – DTH subscribers and penetration – 1998 - 2013
Table 40 – World’s six largest mobile markets – 2012
Table 41 – Mobile subscribers and penetration rate – 1997 - 2013
Table 42 – Evolution of mobile ARPU in Brazil – major operators – 2009 - 2012
Table 43 – Mobile market share by technology – 2004 - 2013
Table 44 – 3G subscribers and penetration – 2008 - 2013
Table 45 – Mobile prepaid/postpaid ratio – 2003 - 2013
Table 46 – Mobile broadband subscribers and penetration – 2008 - 2013
Table 47 – Fixed and mobile broadband market share – 2008 - 2013
Table 48 – Mobile operators’ market share – 2002 - 2013
Table 49 – 3G services – operators’ market share – 2009 - 2013
Table 50 – 3G services (phone & broadband) – operators’ annual growth – 2010 - 2013
Table 51 – Vivo – mobile subscribers – 2002 - 2013
Table 52 – Vivo/Telemig– mobile subscribers – 2002 - 2007 (historical)
Table 53 – TIM Brasil – mobile subscribers – 2002 - 2013
Table 54 – Claro – mobile subscribers – 2002 - 2013
Table 55 – Oi – mobile subscribers – 2002 - 2013
Table 56 – Oi/Amazônia/BrT – mobile subscribers –2002 - 2008 (historical)
Table 57 – Nextel – mobile subscribers – 2002 - 2013
Table 58 – CTBC – mobile subscribers – 2003 - 2013
Table 59 – Sercomtel – mobile subscribers – 2003 - 2013
Table 60 – Forecast fixed lines – higher growth scenario – 2015; 2020
Table 61 – Forecast fixed lines – lower growth scenario – 2015; 2020
Table 62 – Forecast broadband subscribers – higher growth scenario – 2015; 2020
Table 63 – Forecast broadband subscribers – lower growth scenario – 2015; 2020
Table 64 – Forecast mobile subscribers – higher growth scenario – 2015; 2020
Table 65 – Forecast mobile subscribers – lower growth scenario – 2015; 2020

List of Chart


Chart 1 – Fixed and mobile market share at a glance – 2001 – 2013
Chart 2 – Evolution of telecom revenue in Brazil – 2003 - 2013
Chart 3 – Evolution of telecom investment in Brazil – 2003 - 2013
Chart 4 – Fixed line market share at a glance – 2012
Chart 5 – Evolution of fixed lines in service – 1996 - 2013
Chart 6 – Fixed broadband technologies at a glance – 2004 - 2013
Chart 7 – Broadband market share at a glance – 2007 - 2013
Chart 8 – Evolution of pay TV in Brazil – 2001 - 2013
Chart 9 – Pay TV technologies at a glance – 2004 - 2013
Chart 10 – Pay TV operators’ market share at a glance – 2012
Chart 11 – Evolution of Brazil’s mobile subscriber base – 2000 - 2013
Chart 12 – Mobile market share by technology – 2004 - 2013
Chart 13 – Mobile market share at a glance – 2012
Chart 14 – 3G services – operators’ market share at a glance – 2009 - 2013

Exhibit 1 – Map of Brazil
Exhibit 2 – Regions and states of Brazil
Exhibit 3 – Oi (Telemar) group at a glance
Exhibit 4 – Oi – company history
Exhibit 5 – Telefônica Brasil (trading as Vivo) at a glance
Exhibit 6 – Vivo – company history
Exhibit 7 – Embratel at a glance
Exhibit 8 – Embratel – company history
Exhibit 9 – GVT at a glance
Exhibit 10 – GVT – company history
Exhibit 11 – Regions and States of Brazil
Exhibit 12 – Atlantic Cable System – planned
Exhibit 13 – Geostationary satellites operating in Brazil – 2013
Exhibit 14 – Regions and states of Brazil
Exhibit 15 – Net Serviços de Comunicação at a glance
Exhibit 16 – TVA
Exhibit 17 – Subdivision of Brazil into regions and areas
Exhibit 18 – H-band for 3G services – lots, areas, and spectrum winners
Exhibit 19 – Bands for 4G services – blocks, winners, and price/MHz/population
Exhibit 20 – Subdivision of Brazil into regions and areas for mobile licensing
Exhibit 21 – Telefônica Brasil (trading as Vivo) at a glance
Exhibit 22 – Vivo – concessions
Exhibit 23 – The uneasy marriage between Telefónica and Portugal Telecom (historical)
Exhibit 24 – TIM Brasil at a glance
Exhibit 25 – TIM Brasil – concession awards for frequency bands A, B, D, E
Exhibit 26 – Claro Brasil at a glance
Exhibit 27 – Claro – concessions
Exhibit 28 – Oi (TNL PCS) at a glance
Exhibit 29 – Oi – concession awards for frequency bands A, D, E, M

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