|
|
 |
|
Viewing report
|
|
|
|
Latin America Telecom Insider / Vol. 1, No 6, Edition 7 - Brazil's Brave New Mobile Broadband World: The Rise of Data Cards
Pyramid Research, Inc., July 2009, Pages: 12
Mobile broadband will surpass fixed broadband in Brazil by 2011, reaching nearly 27 million data card users in 2014 from 1.5 million in 2008, according to this latest report.
Brazil's Brave New Mobile Broadband World: The Rise of Data Cards examines the potential of mobile broadband computing devices to reach significant adoption levels in Brazil and mobile broadband's prospect of surpassing fixed broadband in the near future. The 12-page report provides the author’s five-year forecast on data cards adoption in Brazil and discusses the strategies of the main mobile players, including two case studies: Claro and Oi. The report discusses the latent demand for broadband in Brazil and points to it as one of the key drivers for our positive mobile broadband estimates.
Data cards are set to become an important driver of broadband adoption in Brazil. Operators should be prepared for strong, sustained growth going forward as mobile broadband becomes a true alternative to fixed broadband in Brazil, notes Fernando Faria, analyst at Pyramid Research and author of the report. 'According to Anatel, the number of mobile data devices in May 2009 was nearly 4.3 million, which represents roughly 30 percent of the total broadband market, already a clear indicator that there is significant pent-up demand still in the marketplace,' he says. 'Pyramid expects mobile broadband to surpass fixed broadband in Brazil by 2011 and to reach nearly 27 million data card users in 2014, from 1.5 million in 2008, a 62 percent CAGR,' he adds.
The value proposition for mobile broadband is unquestionable: Data cards offer an easy way to connect in a variety of locations with competitive speeds. 'Besides this, there are a few other aspects people are starting to pay attention to in Brazil, such as shorter installation time fewer hurdles with LAN compatibility and absence of wires and cabling, to name a few,' says Faria. Although mobile broadband is considered to be more expensive than fixed broadband, as data cards reach significantly higher adoption levels, it becomes financially viable for mobile operators to drop prices.
'Despite this immense potential, the author is observing an early issue with an unexpectedly high churn rate in mobile broadband service, which we credit to the 'frustration effect,' ' explains Faria. 'Provided operators keep improving network quality to address a few early coverage issues, data cards could become the dominant broadband access device in Brazil,' he says.
Key findings
- Brazil’s fixed broadband footprint has not met the market’s need for connectivity, and we expect that the full-scale launch of mobile broadband services in 2009 will rapidly change the competitive scenario. Pyramid Research expects that the mobile data cards market will exceed fixed broadband accounts by year-end 2011, reaching nearly 27m users by 2014.
- Early adoption figures suggest that the market is picking up and that the simplicity associated with a mobile data device has strong appeal. By May 2009, Brazil had 4.3m active data devices users, growing from less than 700,000 in May 2008. These 4.3m users correspond to nearly 30% of the total broadband market.
- The deployment of prepaid mobile broadband offerings will be a key growth driver, offering an inexpensive connectivity alternative that fixed operators cannot offer. The flexibility this modality allows, along with continued subsidy strategies, will continue to give mobile operators a strong edge over fixed operators.
- The flip side of this success story is the fact that mobile operators are still struggling with coverage issues, most likely caused by the unanticipated demand for bandwidth. We understand that a continued effort to roll out their UMTS/HSPA networks is necessary, not only to comply with Anatel’s targets but also to feed the need for broadband services that Brazilian users have been displaying over the past few months.
- As discussed in the case studies of Claro and Oi, each operator will have their own particular set of challenges over the next few months while dealing with this impressive demand. The two other major players — Vivo and TIM Brasil — are also moving fast to position themselves on the forefront of this market. In the end, we believe the biggest winner will be the customers, who will have more options to choose from.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
Brazil - Telecoms, Mobile, Broadband and Forecasts
Strategies for Increasing Share in the Mobile Value Added Services Market in Brazil: Market Profile
Analysis of the Brazilian Total Telecommunications Services Market
Brazil Telecommunications Report Q4 2011
Brazil - Mobile Market - Overview, Statistics and Forecasts
Brazil - Mobile Operators
LATAM Telecoms investment review and forecasts 2010-2014
Brazil Telecommunications Report Q1 2011
Mobile Broadband Computing Services - Complement or Substitute for Fixed Broadband?
Brazil - Fixed-Line Operators
|
|
|
|
