Bundled Offerings Find Traction in the Brazilian Telecoms Market
Published on: 26th May 2014
Note -- this news article is more than a year old.
The deployment of 3G, long term evolution, and fiber optic networks that require high bandwidth and throughput is unlocking new possibilities for telecommunication applications and services in the Brazilian consumer and business segments. The availability of economical products, in large part due to competition in the pay TV and broadband space, will encourage the uptake of telecommunication solutions and services among lower income consumers.
New analysis from Frost & Sullivan finds that the market earned revenues of $68.07 billion in 2013 and estimates this to reach $83.72 billion in 2018 at a compound annual growth rate of 4.2 percent.
The currently modest adoption rates of pay TV, fixed and mobile broadband, and value-added services point to vast untapped potential in the market. Bundling new solutions with existing ones is one way to attract consumers. Establishing novel business models such as over-the-top video services and delivering machine-to-machine and payment applications in mobile networks will also help service providers extend their reach in the Brazilian telecommunications services market.
"Telecommunications operators have put in place a combination strategy to spur revenues, providing cheaper offerings to break into under-penetrated segments, and premium offerings to enhance average revenue per user," said Frost & Sullivan Information and Communication Technologies Senior Consultant Carolina Teixeira. "They are using business and home applications pooled with IT and value-added services as loyalty tools to strengthen customer relationships."
While on the one hand participants are creatively transforming revenue models, on the other, regulatory imbalance issues among smaller operators, high tax burden of telecom services, and spectrum and cost limitations of broadband services are curbing their market scope. The Government, along with national telecommunications regulator, Anatel, must improve regulations and enforce the National Broadband Plan to offset these challenges.
"The regulator must also stimulate infrastructure sharing to motivate competition and services growth," advised Teixeira. "Currently, telecommunications operators in the country are investing heavily in setting up their own networks, thereby reducing profitability, efficiency, and their ability to slash prices."
Within this context, over-the-top services and Internet neutrality are becoming issues of considerable significance in the dynamic Brazilian market.