The world calls for Brazil: telecom developments

08.01.2010 By: TRANSFER

After the most memorable privatizing project in Latin America‘s history at the end of last century, the telecom sector in Brazil was not left aside any longer. In fact, lately the country has been rediscovered by telecom companies worldwide and a ruthless battle for the biggest market share has begun. Strong participants are the Spanish Telefónica and the French Vivendi, both bidding for the upcoming Brazilian player GTV. Other important local players are Telmex, Oi and Analtel, with whom GTV is competing on the home market, while slowly winning terrain.

Please don’t stop the music
Brazil, as one of the biggest upcoming countries in telecom, shows statistics with more than doubled telephone lines within 10 years (from 17 mln in 1998 to 41 mln today) and some sources mention an amount of almost one mobile phone per inhabitant. But mobile penetration mainly took place in the big cities of Rio de Janeiro, São Paulo and Brasilia, while the country average is still low at 36 percent, leaving space for growth and a very diverse market. In the metropolitan areas, where the market is reaching a European level of maturity, operators are also looking for other revenue sources. Next to SMS messaging also ringtones are very popular in this country, known for its lively music culture. The amount of ringtones that have been downloaded only the last few years generated millions of dollars in royalties for the music industry alone. 

Endless opportunities
Although the sales of both mobile phones and fixed lines are flourishing, the telecom infrastructure still needs to be improved and developed to be able to connect a potential market of another 162 million people to the internet. The Brazilian government recognizes this priority and is planning to install 31.000 km of optical fibre.

Pyramid Research 's latest Country Intelligence Report concluded that the Brazilian market is expected to grow at an annual rate of 2.9 percent ($55.8 billion in 2008, projected to hit $64 billion by 2013), driven by fixed and mobile data services. As competence is an important ingredient for success in the Brazilian telecommunications market, operators need to rapidly and effectively deploy new technology acquisitions too. 

The world has its eye on Brazil
Foreign telecom companies understood this principal and intend to introduce new products that concern mobile computing, various security and wireless broadband technologies. Dell for example is to launch its first smart phone in Brazil; next to China one of the world's largest markets. Dell’s handset will be introduced by América Móvil's Claro unit.

Brazil has been a popular market for investment for several years, attracting a number of international companies with its openness and the fact that it arrived to make a swiftly exit from the economy recession. But Brazilian telecom companies too, like Nokia do Brasil, move towards foreign markets like the European market and the BRIC country prepares itself to become an international player on the international telecom market.

In short, Brazil’s telecom market is growing and playing an important role within the country’s economy as well as in world’s economy. This development is positive for Brazil, but also creates solid business opportunities for European telecom companies.