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Brazil Telecommunications Report Q1 2012
Business Monitor International, Jan 2012, Pages: 117
Business Monitor International's Brazil Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's telecommunications industry.
- Benchmark BMI's Independent 5-Year Telecommunications Industry Forecast for Brazil to test other views - a key input for successful budgeting and strategic business planning in the Brazil telecommunications market.
- Target Business Opportunities & Risks in Brazil's Telecommunications Sector through BMIs reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Brazil.
- Exploit Latest Competitive Brazil Telecommunications Intelligence & company SWOTS on your competitors and peers through company rankings by sales, market share, investments and leading products and services.
Brazil reported impressive growth in Q311. Mobile subscriber net additions totalled 10mn, while the expansion of the PNBL has led to a proliferation in broadband connections. Although the country is experiencing a slowdown in general economic growth, the telecoms market remains relatively buoyant. The change in legislation of Q311 to allow telecoms companies to offer pay-TV services has led to the further consolidation of many of Brazil's major players. Telemar Participações secured the approval from its boards of directors to merge its three units - Brasil Telecom, Tele Norte Leste Participações and Telemar Norte Leste - into one single firm in September 2011, following in the footsteps of America Movil and Vivo. The restructuring plan is still subject to approval from shareholders.
Net Serviços, Embratel and Claro have announced plans to offer quadruple-play multi-service packs from October 15 2011, in line with similar moves from rival Telefónica. Although Net Serviços and Embratel already offer joint services, the inclusion of Claro's mobile offering is new. BMI welcomes this move, believing it will allow further network synergies, increased efficiency and benefits for consumers. However, in the long term BMI are worried about consolidation in the Brazilian market and the lack of competition that may result.
In terms of the PNBL, expansion in rural and remote areas is still strong, and collaboration between the Brazilian government and private operators pushes this further. In October, the Brazilian State Development Bank (BNDES) agreed to lend Vivo BRL3bn (US$1.7bn) to expand 3G coverage throughout the country. This is the largest loan BNDES has granted to a telecommunications company since the privatisation of Telebras in 1998. BMI believes the loan will have a positive impact on Brazilian telecoms infrastructure development, which is necessary ahead of the World Cup and Olympic Games in 2014 and 2016.
Brazil remains one of BMIs favourite Latin American telecoms markets this quarter, just behind Chile in BMIS BERs. It has reported rapid expansion, particularly in the broadband and pay-TV markets. The market reached 115.5% penetration in Q311, an impressive jump in penetration rate of 5.5pps from Q211. BMI believe Q411 will report similarly large numbers of net additions in advance of the Christmas period, as the fourth quarter is traditionally a quarter of high demand.
TIM continues to consolidate its lead over Claro in the mobile market, recording the highest number of net additions this quarter. Concurrently, falls in ARPU have not been as dramatic as those of Claro, an interesting occurrence, showing that it is still managing to raise revenues from its new additions, while Claro is struggling to keep pace. However, Vivo remains far in the lead in terms of ARPU and subscriber numbers, a fact BMI do not see changing in the medium run.
In the broadband market, leader Oi reported 4.78mn broadband subscribers in Q311, representing a 29.9% % share. This was down from last quarter's 30.5% share, and closest competitor NET Serviços appears to be catching up. The operator gained 0.6% market share, finishing Q311 with 26% of the market and 4.16mn connections. The company saw strong growth as a result of its triple-play partnership with long-distance (LD) operator Embratel, and has retained its market share despite strong competition from other players. Both companies are owned by Telmex Internacional, which was acquired by América Móvil in June 2010, and results are no longer published separately.
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