Mobile Broadband to Surpass Fixed Broadband in Brazil by 2011

Mobile broadband will surpass fixed broadband in Brazil by 2011, reaching nearly 27 million data card users in 2014 from 1.5 million in 2008, according to a new report from Pyramid Research. Data cards are set to become an important driver of broadband adoption in Brazil. Operators should be prepared for strong, sustained growth going forward as mobile broadband becomes a true alternative to fixed broadband in Brazil, notes Fernando Faria, analyst at Pyramid Research and author of the report.

"According to Anatel, the number of mobile data devices in May 2009 was nearly 4.3 million, which represents roughly 30 percent of the total broadband market, already a clear indicator that there is significant pent-up demand still in the marketplace," he says. "Pyramid expects mobile broadband to surpass fixed broadband in Brazil by 2011 and to reach nearly 27 million data card users in 2014, from 1.5 million in 2008, a 62 percent CAGR," he adds.

The value proposition for mobile broadband is unquestionable: Data cards offer an easy way to connect in a variety of locations with competitive speeds. "Besides this, there are a few other aspects people are starting to pay attention to in Brazil, such as shorter installation time fewer hurdles with LAN compatibility and absence of wires and cabling, to name a few," says Faria. Although mobile broadband is considered to be more expensive than fixed broadband, as data cards reach significantly higher adoption levels, it becomes financially viable for mobile operators to drop prices.

"Despite this immense potential, Pyramid is observing an early issue with an unexpectedly high churn rate in mobile broadband service, which we credit to the 'frustration effect,' " explains Faria. "Provided operators keep improving network quality to address a few early coverage issues, data cards could become the dominant broadband access device in Brazil," he says.

Posted to the site on 28th July 2009