Brazil needs to improve its backhaul, backbone infrastructure, firms say

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Brazil has to improve the capacity of its backbone and backhaul infrastructure to support the increasing demand of data, said Informa Telecoms & Media and Brazilian consulting firm Teleco during a news conference held by information and communications technology company Huawei.

In a recent survey, Informa compared London’s mobile broadband infrastructure (because the city will host next year’s Summer Olympics) with those of capital cities São Paulo and Rio de Janeiro.

“Although 3G adoption is newer in Brazil than UK, the Brazilian network is worst. London has more subscribers and better performance in an older network. In addition, they are much more heavy users of mobile TV, videos and data, which require more bandwidth,” said Marceli Passoni, Informa’a senior analyst.

In this year’s third quarter, only 0.1% of total Brazilian connections were on fiber-to-the-home networks. To increase fiber optical is urgent, but that does not mean carriers will abandon other technologies, such as satellite, said José Luiz Souza, Teleco’s vice president.

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In addition to backhaul, Souza noted a need of more spectrum band and the importance to bid 700MHz and 2.5GHz. “We hope that regulator makes the right choice, in choosing 700MHz, which is the frequency band where U.S. has allocated LTE.”

Brazilian regulator agency Anatel has already said that it may bid 2.5GHz for 4G. The auction is expected to happen in April.

According to Teleco’s survey, mobile broadband has been increasing at a very high rate and more rapidly than fixed. Teleco predicts that 2011 may close with 17 million fixed broadband access and 38.1 million of mobile. By 2014, the difference may be even bigger: 30 million fixed broadband access users and 92 million mobile.

The growth of mobile access may boost the data share in carriers’ revenues, which is already a reality in more mature markets. Data represents 50% of income for Japanese carriers, Teleco said, compared with more than 40% for U.S. carriers, 30% for European carriers — and about 20% for carriers in Latin America

“The voice share is decreasing, so data become an important revenue to carriers,” Souza said. “In Brazil, data called for 19.5% of the total services revenues. Vivo owns the largest with 23.4%, followed by 15.7% of TIM and 13.4% from Oi.”

Modem and smartphones prices are key factors to rise data and services share in the income. Teleco showed that 3G devices prices fell 15% in the third quarter. However, 3G devices cost 2.5 times more on average than GSM phones.

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