Abstract
All areas of Brazil' s telecoms market saw growth in 2008 including the
fixed-line market, which had
previously reported a decline. This reflects
the high level of competition present across the country, with
several
operators competing for subscribers. Alternative operators have more than held
up the fixed-line
market in 2008 with the incumbents Oi and
Telefônica reporting continual declines in their subscriber
bases.
Cable operators and smaller companies such as CTBC and Embratel have been
instrumental in
bringing growth back to the fixed-line market, and BMI
anticipates this will keep the market growing
until 2011, by which time
mobile substitution will finally win out.
For the first time, Oi reported
its quarterly results including the operations of Brasil Telecom, which it
finally acquired in January 2009. The merger has created a single operator
with by far the largest shares
of the fixed-line and broadband markets.
However, as the results show, the merger has taken its toll with a
98%
decline in net profit for the operator. Nonetheless, the new Oi should benefit
from some significant
economies of scale following the merger of its
operations with Brasil Telecom and expects to become a
major player on the
Latin American telecoms stage.
In the broadband market, growth remained
above 40%, with 2008 growing slightly faster than 2007 and
seeing 10mn
connections reached by the end of the year. As in the fixed-line market, it is
alternative
operators that have been providing large amounts of the growth
in the market. Although DSL remains the
favoured technology for broadband
connections in Brazil, there is growing interest in cable modem
connections with triple-play services helping to drive up subscriptions.
However, the strong competition
is causing operators to report declining
ARPUs from their broadband operations although this should
improve in the
long run as subscribers require greater bandwidth for a wider variety of
applications.
As mentioned in our previous report, we have concentrated on
the fixed-line and broadband markets in
this update, adding further data
on the status of both markets and a look into some different technologies
present in each. For this reason the mobile data analysis section has been
left untouched although we have
provided a full update of the mobile
operator databases and mobile forecasts.
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