Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
The Brazilian telecommunications market will over the next two years will face its best time since its opening to private initiatives. Here are eight issues, facts or trends, that deserve attention.
No. 1 – Mobile payments and NFC:
Mobile payments has still not happened yet in Brazil, but the trend is growing and is expected to pick up steam this year. A number of important partnerships have been closed that have the potential to kick start the market.
- Bradesco (one of the major private banks in Brazil) and América Móvil’s Claro have started a new company for m-payment.
- Vivo, the Brazilian unit of Spain’s Telefonica, and MasterCard have also created a joint venture in Brazil.
- Payment processing company Cielo and m-payment service provider Paggo last year announced network expansion plans.
- São Paulo State Public Transportation company announced its intention to implement mobile payments via NFC.
No. 2 – More than 50 million mobile broadband devices:
January was an excellent month for Brazil’s mobile broadband market as the number of mobile broadband-capable connections grew more than 23%, hitting 20.7% of the Brazilian device market. Let’s remember that the market ended December with less than 17% share. Also, in 2011, Brazil’s mobile broadband market increased more than 82% and for this year is expected to produce similar results.
Check 2011 market statistics here.
No. 3 – The beginning of mobile virtual network operators:
MVNOs are expected to start commercial operation this year across Brazil. Porto Seguro and Virgin Mobile/Datora are set to be the two first MVNOs to go to market, and mobile virtual network enablers are already authorized to help establish MVNOs.
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No. 4 – LTE Is a reality: The Brazilian government is pushing LTE technology to be ready for the FIFA 2014 World Cup.
The first Brazilian LTE network was not launched by a mobile carrier, but instead by cable and satellite television operator Sky, which surprised the market and launched a TD-LTE fixed broadband service in Brasilia late last year. Nokia Siemens Networks is the sole vendor of the solution.
No. 5 – Converged services: Current Brazilian regulation are not meant to support converged services. A subscriber that wants to buy a quadruple-play solution – mobile voice and data, fixed broadband, wireline voice and pay-tv – has to sign four contracts, one to each service. And if they wants to register a complaint for all the services, they will have to phone four distinct call centers. This is one of the main reasons for confusion between costumers and carriers.
Another important question is how should VoIP be regulated. As João Rezende, the president of the Federal Government Telecommunications Agency (Anatel), stated in the 14th Telecommunication Policies Seminar, the agency and the federal government have begun thinking about a new telecommunications regulation model.
No. 6 – Wi-Fi offloading:
Oi, Tim and Claro, three of Brazil’s four largest mobile network operators, have announced plans to implement Wi-Fi hot spots to offload data from their 3G networks. The reasons for this move are the costs associated with spectrum licenses and infrastructure.
The main objective is to relieve data traffic from 3G networks that are facing congestion problems.
No. 7 – Fiber, fiber, fiber and more fiber: Fiber-to-the-home, fiber-to-the-building, fiber for backhaul and fiber for the backbone. This is the only way to support mobile data traffic that is expected to grow by the 2014 FIFA World cup.
According to many market analysts and experts, 2014 will be the “World Cup of connected mobile devices” and it’s necessary to prepare the infrastructure. Carriers are investing in order to prevent a crash by 2014. Some of those initiatives include:
–Telefonica has announced more than one million houses will be able to be connected by fiber by the end of 2011.
—TIM acquired AES Atimus and its 5.5 million kilometers fiber network and restructured it to a new subsidiary, TIM Fiber. The company also stated that is seeking partners for door-to-door sales in the residential segment.
–Claro, in June 2011, announced investments to expand its fiber network to 80,790 kilometers, reinforcing its backbone and backhaul.
No. 8 – Cloud for mobile carriers: Mobile cloud is a big issue for 2012.
Oi has started to provide cloud computing services to large enterprises, benefiting from its synergy with Portugal Telecomm. Also, Oi has stated its intention to become an ICT firm, providing IT services to the corporate market targeting the 15,000 largest companies in Brazil.
Claro is aiming at the retail market, planning this year to launch mobile cloud services in areas such as music, video, books and file storage. Claro’s strategy is based on its success in mobile broadband access.
Maria Luiza Kunert is a Brazilian telecommunications executive with almost 20 years in the wireless market. Kunert, who has a degree in electronics engineering, has worked for network infrastructure vendors such as Ericsson and NEC and for service providers such as Vivo. Since 2009, she has worked as regulation adviser for Anatel, the Brazilian telecommunications government agency.
