Hong Kong – Today the GSMA released its first comprehensive assessment of Brazil’s mobile sector, revealing fresh insights into the breath-taking speed with which mobile technologies have pervaded Brazilian life. The GSMA Brazil Mobile Observatory1 details the explosive growth of the sector and the range of services that mobile is enabling for Brazil’s citizens.
Brazil is the fourth largest mobile market in the world with more than 260 million active mobile connections, 60 million of which are mobile broadband. Brazil is set to maintain a strong pace of growth and reach 135 million mobile broadband connections by 2014. The increasing uptake of mobile technologies and services, including NFC, mHealth, mEducation and mCommerce, will further shape Brazil’s mobile future.
“Mobile services are at the forefront of Brazil’s transformation through widespread broadband reach and by promoting innovation and affordable data services through major infrastructure investments,” said Franco Bernabè, Chairman, GSMA and Chairman and CEO, Telecom Italia Group. “There is now a real opportunity for mobile to deliver even greater socio-economic benefit for the country and beyond.”
Exponential Growth of Mobile Data and its New Business Opportunities
As the affordability of smartphones and tablets increases in Brazil, data traffic per user is expected to grow on average by 83 per cent per year between 2008 and 2020, with over 75 million smartphones forecast in 2016.Demand for mobile broadband is expected to increase 19-fold between 2011 and 2016.
By transforming the way consumers and businesses operate and communicate, mobile broadband services will further increase productivity, allowing local small and medium enterprises to participate in the mobile value chain by producing local content, software and applications. The mobile industry is at the core of the economy’s innovation ecosystem and new services such as mCommerce, mMoney, mHealth, mEducation and Smart Cities will be enabled by technologies such as NFC and machine-to-machine (M2M) connectivity.
The 2014 FIFA World Cup and the 2016 Olympic Games in Rio will only further increase demand for mobile services. The World Cup is expected to generate over one million roaming connections, producing 300 per cent of the normal data traffic for a period of eight weeks. Analysts estimate that during the London 2012 games, 60GB of data crossed the network in the Olympic Park every second, and this figure is likely to grow substantially in four years’ time. Providing extra capacity in such a limited time window will be a major challenge for operators.
Allocating the Digital Dividend to mobile
Mobile networks are likely to come under significant strain if additional spectrum is not continually allocated to mobile services. The 700MHz band, known as the Digital Dividend, is currently allocated in Brazil to broadcasting services but has ideal properties for improving mobile coverage and combines effectively with the 2.5GHz band for seamless availability of 4G services. A GSMA/TAS study recently calculated that the allocation of the 700MHz band for mobile services would provide an additional direct and indirect contribution to the Brazilian GDP of US$ 5.3 billion, and generate over 4,300 job opportunities and additional tax revenue of US$ 1.3 billion2.
Simplifying Regulation and Reducing Taxation
Despite the mobile success story in Brazil to date, a number of key constraints on the sector are undermining its full potential. Complex, prolonged approvals by national and local authorities for site and antenna deployment have been identified as the greatest obstacle to further investment by the mobile community. Regulations on power limits for electromagnetic waves and tower build out licensing are just as complicated and unaligned among government bodies, with over 250 different antenna policies. Furthermore, levels of taxation on both mobile consumers and operators in Brazil are amongst the highest in the world.
“Consultative, transparent and stable regulation, greater coordination between local and national authorities and lower taxation will optimise investment opportunities in mobile,” continued Bernabè. “This will be key for successful deployment of Long-Term Evolution (LTE) services, making them available in time for the 2014 World Cup.”
Economic and Social Impact of Mobile in 2011
Mobile operators and the wider mobile ecosystem have contributed significantly to Brazil’s economic and employment growth:
- · Revenue generation by mobile operators: US$ 14.8 billion in 2011, representing an estimated 2 per cent of Brazilian GDP.
- · Investment by mobile operators: almost US$ 23 billion since 2008.
- · Direct impact of entire mobile ecosystem3: US$ 53.8 billion, an increase of 20 per cent from 2008.
- · Overall impact, factoring in increased productivity, price reductions and greater consumer usage:US$ 110.6 billion or approximately 4.6 per cent of GDP.
- · Contribution to national employment: 250,000 full-time time employees in the mobile communications industry last year.
The social benefits of mobile in Brazil are extensive and range from greater personal communication and increased social cohesion to access to vital services for people on low incomes and in the most rural areas. With the government’s target of 60 million broadband connections by 2014 already achieved due to the rapid growth and extensive investment of the mobile sector since the introduction of 3G services four years ago, the GSMA is now calling for the government to consider a further role for mobile in Brazil’s strategy for social change.
“The mobile industry will lead to a wave of transformation in the way Brazilians communicate and live their lives,” said Anne Bouverot, Director General, GSMA. “The country faces a number of challenges in the next years, including the successful delivery of the World Cup and Olympic Games. By working in partnership, operators and government can build on the success story of the mobile industry, extending its unique benefits nationwide and boosting Brazil’s image on the world scene.”
