17/10/2006


Five groups dominate Telecom's brazilian market

 

Telecom Italia's decision to leave Brasil Telecom (BrT), the exit of Opportunity from the management of Telemig/ Amazônia Celular and the acquisition of Vivax by Net become very clear the groups that dominate the brazilian market of telecommunications.

 

 

Note: Telemar includes Oi and BrT to BrT GSM

 

The following table presents the Gross Revenue and Margin EBITDA of these groups in the 1st semester of 2006. Tim's market value was superior than Telemar in September/06, although presenting a lesser Gross Revenue.

 

R$ Thousands (Jan-Jun/06)
Gross Revenue
Margin EBITDA
Market Value*
Telefonica/Vivo
17,588
24.7%
35,429
Telemar
11,668
26.3%
16,509
Embratel/Claro/Net/Vivax
11,185
16.2%
N.D.
BrT/Amaz/Telemig
8,348
22.2%
8,487
Tim
6,091
16.7%
16,610

*Adding values of emmited shares to negociation in the Stock Exchange in Sept/06

 

In the current regulatory situation the trend is market consolidation in these five groups. Can occur, however, some changes in the control of BrT or Tim and the sale of Amazônia and Telemig Celular (Consult Teleco's Commentary). More significant changes would depend on alterations in the regulation that became possible to congregate in the same group more than one fixed telephony concessionaire. In this case, the control of BrT would be disputed by Telemar, Telefonica and Embratel (Telmex).

 

The control of local telephony concessionaires has been so far the greater tool of the groups in which participate: Telemar, BrT and Telefonica.

 

Telemar and BrT adopted a strategy of regional performance directed to promote services in the region where the local telephony concessionaires are, betting, for example, in the convergence of Fixed- Mobile. Telefonica already has national performance, it is the cellular leadership with Vivo.

 

The groups of Embratel and Tim can be seen as challenging that want to extend its participation in the market betting in the cellular and in the broad band/VoiP as substitute of the conventional fixed telephony.

 

Telecom Italia's decision of sale its participation in BrT becomes clearer the position of Tim with "Tim Casa" which starts to bet in the cellular as substitute of the conventional fixed telephone.

 

Embratel, that has a significant participation in the corporative market, now looks for to extend its performance in the residential market through Pay TV Operators with offers of broad band and telephony (VoiP). Net and Vivax had together 1.9 million TV subscribers in Jun/06, about 76% of the cable TV subscribers in Brazil.

 

 

Looking at the text above you could ask:

  • To control a local concessionaire of fixed telephony is a necessary condition to occupy the leadership in the brazilian market of telecommunications?
  • Are the strategies of Telemar and BrT's regional performance sustainable in the long stated period ? Will they have to leave to a national performance?
  • Is Tim's strategy- pure mobile- sustainable in the long stated period? How will Tim advance in the Broad Band?
  • How the entrance in operation of Wi-Max modify the current competitive situation?

 

Comment.

 

To send us a commentary, click on: teleco@teleco.com.br

 

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