Spotlight: The state of Brazil’s telecom sector

Brazil ended October with 230mn mobile lines in service, which is up 0.7% year-over-year and represents a penetration of 95.5%, according to the latest data from regulator Anatel.

Of the total, 50.4% corresponded to postpaid accesses.

Postpaid has surpassed prepaid and has become for the first time the most common type of mobile contract in the country.

Around 203mn of the active mobile lines in October accessed the internet and 4G accounted for 73.2% of those. 3G, in turn, is now less than 15% of the total.

Telefônica Brasil led the market with a 33.6% participation, followed by Claro (25.2%, excluding Nextel), TIM (22.3%) and Oi (15.9%).

FIXED BROADBAND

The country also reached 35mn fixed broadband accesses, an increase of 5.5% over October 2019 but down from the month before for the first time in the year.

The service was available to 43.1% of households.

Fiber optics continues to grow and makes up over 44% of total accesses.

Claro had 28.2% of the fixed broadband market, followed by Telefônica Brasil (18.5%) and Oi (14.5%), with small internet service providers accounting together for 33.3% of the segment in October.

PAY TV

Pay TV keeps declining, having lost over 1mn subscriptions in 12 months to reach around 15mn at end-October, with a 21.3% penetration.

Of the total in service, 42.9% are via cable and 49.8% via satellite (DTH). Claro leads with a 47.3% share, followed by Sky/AT&T (30.7%), Oi (11%) and Vivo (8.4%).

Speaking at the ABDTIC telecom regulation event on Monday, Anatel’s competition superintendent Abrãao Balbino backed the review of the country’s pay-TV regulatory framework to allow telcos to produce and distribute content just as OTTs, which is not allowed under the current legislation.

Audiovisual agency Ancine is also contributing to the working group created by the communications ministry to review the legal framework which may result in the merger of the two agencies that regulate the service (Anatel and Ancine), following the recommendation of the Organization for Economic Cooperation and Development (OECD). 

There are also different bills under discussion in congress aimed at further liberalizing the segment. 

Balbino, however, said the challenge in the market is to find the right business model. 

“It is not up to the regulator to determine how the market chain works. The rules need to exist to make business feasible, avoiding market failures, abuse of economic power and protecting the consumer,” he said.

The official said the consumer will be financially constrained to subscribe to so many streaming products. Balbino believes that the sector could end up bundling the services (Netflix, Amazon, HBO Go, Globloplay, Disney+) into packages, just like traditional pay TV.