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Telecom service companies focus on increasing data capacity and expanding geographic coverage

SÃO PAULO: The current Brazilian economic crisis, regulation imbalances for smaller operators, high tax burdens for telecom services, and spectrum and cost limitations for broadband services continue to dampen growth in the Brazilian telecommunications services market, which saw $40.35 billion in revenue in 2015.

“We did see a 31.4 percent drop in revenue last year in this market due to depreciation of the local currency,” explains Carina Gonçalves, Digital Transformation Industry Analyst for Frost & Sullivan. “However, we can expect moderate growth over the next few years, with estimated revenues of $46.99 billion expected by 2021, mainly driven by the increasing penetration of pay TV and broadband, rising competitive forces, the rise in multiple-play bundles and value-added services (VAS) offers, and infrastructure investments for the expansion of fiber-optics networks and mobile broadband networks.”

According to The Brazilian Total Telecommunications Services Market, a new analysis from Frost & Sullivan’s Digital Transformation team, services providers that are growing above market, such as regional player Algar Telecom and global players like Level 3 and Orange Business, are emphasizing customer service, innovative business strategies and network expansion.

To request complimentary information on this analysis and to register for a Growth Strategy Dialogue, please click here or send an e-mail to Francesca Valente, Corporate Communications: francesca.valente@frost.com

While mobile data, fiber-to-the-home (FTTH) and Internet protocol television (IPTV) revenue services have double-digit growth compared to 2014 (30.0 percent, 90.8 percent, 58.1 percent, respectively), mobile and fixed-voice services presented significant drops of 11.1 percent and 4.6 percent, respectively. Causes for these drops are related to decreasing mobile termination rates, cost reduction initiatives by consumer and enterprises due to the economic situation, as well as substitution for other types of communication, such as messaging and unified communication & collaboration solutions.

“In general, service providers are likely to find more growth opportunities in less penetrated markets, such as pay TV and fixed and mobile broadband, with the rise of small cable TV associations and internet service providers (ISP) in the Brazilian market,” says Gonçalves. “Moreover, over-the-top services are also increasing adoption, stimulating price re-positioning of traditional services. Data and demand for mobile connectivity services are the main drivers for most of these competitive forces.”

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(This story has not been edited by Business Sandesh Group and is published from a syndicated feed.)

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