02/22/2010


What are the obstacles for the broadband growth in Brazil?

 

Broadband was one of the most discussed themes in Brazil in 2009. It was established a deal about the necessity of amplifying the number of accesses and about the Brazilian Government's initiative to prepare a "National Plan for Broadband".

 

Mobile broadband presented a strong growth in 2009 with net adds of 3.9 million accesses. The year was closed with 7 million accesses and density of 3.6 accesses/100 inhab., lower than the world average of 9.5 accesses/100 inhabitants.

 

In 2009, the growth in fixed broadband was lower than in the previous years, with net adds of 1.5 million accesses.

 

 

 

Fixed broadband finished 2009 with 11.5 million accesses and density of 6.0 accesses/100 inhab., which was lower than the world average of 7.1 accesses/100 inhab.

 

The main fixed broadband operators in Brazil presented drop in their net adds in 2009.

 

 

Note: Oi's net adds for 2009 were estimated by Teleco

 

Telefonica's low growth can be attributed to Speedy's problems, which led to sales suspension (by Anatel's demand) and negative net adds. Net, which had been leading net adds over the last two years, presented in 4Q09 net adds of 92 thousand accesses and may have been surpassed by Oi in the quarter.

 

 

What are the obstacles to accelerate broadband growth in the country?

 

The Brazilian fixed broadband networks have restricted coverage and low speeds. These networks also face capacity problems, because the number of users is rocketing not only in Brazil but all over the world. By this scenario, associated to weak competition outside big cities, operators concentrate more efforts in the provision of services to their current clients than in the offer of promotions to increase the user base.

 

In order to change this scenario, operators would have to invest heavily in expanding their fiber optic networks to get closer to the next clients. This is the option to increase the speed in networks and decrease the cost per bit, permitting the sale of packages of higher speeds for cheaper prices.

 

Check, for example, the prices charged by Cox, operator of cable TV in the United States which has a modern broadband infrastructure.

 

 

Cox's Fixed Broadband
Speeds
Monthly Price (R$)
20 Mbps
90
10 Mbps
72
1.5 Mbps
54
768 Kbps
36

 

 

Cox's monthly average use rate by client reaches 8 GBytes but 1% of these clients use more than 200 GBytes per month.

 

In order to keep growing, mobile broadband faces the same problem as fixed broadband does. They will have to link most part of their cell sites by using fiber optic if they want to offer higher speeds and supply the demand with quality.

 

You could ask:

  • Which will be the growth for fixed and mobile broadband in 2010?
  • How to accelerate broadband growth in the country?
  • What should government do to stimulate the construction of optical networks?

 

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Note: The opinions expressed in the published articles in this section are their authors' responsibility.

 

 

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