Editor’s Note: With 2013 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
2012 represented a milestone for the Brazilian mobile market. Mobile telephony reached density of more than 130 lines per 100 inhabitants and the country is likely to have, for the first time, annual growth in excess of 10%. It was a year of transition with the voice market reaching maturity and operators increasing their focus on mobile broadband.
In 2013, mobile operators won’t be able to count on the growth of their cellular base to leverage an increase in revenues. Voice revenues are likely to drop, pressured by decreases in the prices charged for on-net calls and a drop in interconnection revenue determined by regulatory agency Anatel.
Considering this scenario, operators will increase their focus on data services, stimulating smartphone sales and expanding their 3G and “4G” networks.
The migration of GSM handsets, which still represents more than 70% of mobile lines in the country, for 3G will also accelerate in 2013, though 3G handsets are not likely to overtake GSM devices until 2015.
Competition may become even stronger due to the beginning of Nextel’s 3G operations, with the biggest growth coming from the postpaid segment that has increased at a faster rate than prepaid in 2012.
Virgin Mobile is set to begin its mobile virtual network operator service, which could then entice others to enter the market and helping to establish the MVNO market inside Brazil. We don’t expect, however, alteration in the rankings of the current cellular operators, with Vivo likely to keep its leadership, followed by TIM, Claro and Oi.
There’s big expectation in connection to the launch of “4G” services in Brazil and should be one of the hot themes for 2013. The uptake of services, however, will begin in a gradual away with low initial adoption hampered by the high cost of devices.
Fixed market
For the fixed services market, which includes fixed telephony, broadband and pay-TV services, the focus will be on increasing investments in FTTX-based fixed broadband networks. Fixed broadband will continue to grow at an annual rate of 20%. Pay-TV, which increased 27% in 2012, due to DTH, is likely to keep this growth pace in 2013, with bigger growth expected of cable TV and IPTV.
América Móvil Group (Embratel/Net) may overtake OI and become the market share leader in fixed broadband, something that has already happened in the pay-TV market.
Players
Brazil presents a consolidated scenario of players in the telecom space with three groups (Telefônica, América Móvil and Oi) controlling 70% of the total revenues for the sector.
We don’t expect big changes in this scenario for 2013, though we do see a few events that need to be monitored, including:
–The consolidation of the companies owned by América Móvil with the merger of Claro and Embratel.
–GVT’s sale by Vivendi. This scenario could be impacted if GVT was purchased by any of the groups that operate inside the Brazilian market. The bigger probability, however, points out that the company will be acquired by investment funds, which wouldn’t change the competitive scenario in Brazil.
