Brazil Intelligence Report

Brazil: 3G and Service Bundling Will Drive Network Operator Revenue Growth

Brazil is the largest telecommunications market in Latin America, with total telecom revenue of $49.5bn in 2009, down $6.3bn from 2008. We expect revenue in Brazil will grow at a CAGR of 5.9% through 2014, fueled by expansion in mobile data services and broadband Internet access.

Mobile broadband using 3G networks is taking off in Brazil, contributing along with mobile entertainment services to mobile data revenue more than tripling to $12.7bn in 2014, from $4.3bn in 2009. The mobile sector as a whole will continue growing thanks to an 11-point advance in mobile penetration of the population.

Consolidation continues to reshape the Brazilian communications market. After acquiring Brasil Telecom, Oi became the market leader in total telecom revenue (fixed, mobile plus pay-TV); its new mobile license to operate in Sao Paulo will make the company less dependent on its fixed arm and boost its growth. GVT was acquired by French media company Vivendi, which we believe will invest in the company and expand its coverage, today limited to certain states. Also, long-distance and data carrier Intelig was acquired by TIM, which will rely on the recently acquired network to improve its mobile data services.

On the regulatory front, developments are dominated by a thorough revision underway of the basic telecommunications law (Lei Geral das Telecomunicações, or LGT), triggered by Oi’s acquisition of Brasil Telecom. Other items on the agenda include WiMAX spectrum auctions, 4G spectrum auctions and PL29, a law that establishes a minimum percentage of pay-TV channel programming that must filled by content produced in Brazil.

Table of Contents
Executive Summary
Market and Competitor Overview  
   Brazil in a Regional Context 
   Economic, Demographic and Political Context
   Regulatory Environment 
   Demand Profile
   Service Evolution
   Competitive Landscape
   Major Market Players
Segment Analysis
   Mobile Services
   Fixed Services
   Pay-TV
   Convergence
Identifying Opportunities 

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Author: Vinicius Caetano

Publication Date: March 2010