06/23/2008


Vivo leads Christmas and Mother's Day

 

The competition between cell phone operators got worse in 2008, accelerating the growth of cell phone in Brazil. The accumulated net adds until May/08 already added 9.6 million cell phones, against 5.2 million in same period of 2007.

 

The month of May, however, submit a different result from the first 4 months of the year, when Oi and Tim led growth. (more details).

 

Vivo (976 thousand) and Claro (701 thousand) were the leading operators in net additions in May, overcoming Oi (510 thousand) and Tim (391 thousand).

 

This result, apparently surprising, seems not to have happened by chance. Vivo and Claro have been highlighted in net adds in months with special dates such as "Mother's Day" (May) and "Christmas" (December).

 

 

One possible explanation for this trend is the fact the two operators have a greater focus on sales of devices than Oi and Tim. A unit subsidized, combined with a promotion as of 5 cents per minute of Vivo, just becoming more attractive as gift.

 

The growth of Vivo was strong throughout the country. It regained leadership in market share (28.8%) in the state of Minas Gerais, ahead of Tim (27.98%). Telemig had lost the leadership in Sep/07

 

 

It deserves also highlight the performance of Vivo in the metropolitan region of São Paulo (Area Code 11).

 

Net Adds in São Paulo ( Area Code 11)
Millions
Jan/08
Feb/08
Mar/08
Apr/08
May/08
Vivo
63
27
58
62
152
Claro
69
36
75
75
135
TIM
132
101
72
92
96

 

In May, Vivo went up the third place in net adds that held the first 4 months of the year, for the leadership with net adds of 152 thousand cell phones.

 

With the result of May Vivo took the lead in cumulative net adds in the year (2,371 thousand cell phones), surpassing Oi (2,303). Oi presented in May performance at the same level of previous months and may recover this leadership in the coming months.

 

Claro also presented a good result in May and managed to reduce the gap that separates it from Tim. This difference, which had risen to 1.6 million cell phones in the beginning of the year, dropped to 1.1 million in May.

 

 

In May, Tim failed to repeat the good performance of previous months. It was the only operator that has lost market share this month. This way motivates the dispute between Tim and Claro for the second position in market share of cell phone in the country. (more details).

 

BrT, which had a level of monthly growth of 2.2%, jumped to 4.9% growth in May/08. It was the leader in net additions in the Region II (230 thousand cell phones) this month. The greatest success was achieved at the Centre West, where net additions of BrT increased from 68 thousand in Apr/08 to 152 thousand in May/08.



Brazil ended May/08 with 130.5 million cell phones and a density of 68.2 cel/100 inhabitants. The accumulated net adds in the last 12 months already are 25.5 million cell phones.

You could ask:

  • Who will lead cellular growth in 2008?
  • Will Vivo and Claro repeat in june (Valentine's day) the success got in May?
  • Will Claro overcome Tim?
  • What will be cellular growth in 2008?
  • What will be the performance of the churn in 2008? It tends to increase?
  • Will the strategy of investing in equipment offers and intra-network affect margins?

 

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

 

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