01/02/2023
What to monitor in 2023
2022 was a good year for the telecommunications sector and 67% of those who responded to Teleco's poll expect 2023 to be better or much better.
The main trends to be monitored in the year are presented below.
- 5G
- Liberation of 3.5 GHz: It's taking place at an accelerated pace and the goal is to liberate 25% of the municipalities having more than 30 thousand inhabitants (443), including all the cities having a population greater than 200 thousand, in Jun/23. It's possible that the year will end with this frequency liberated in about a thousand municipalities.
- 5G Coverage: Vivo, Claro and TIM may start to have different schedules to cover the municipalities where the 3.5GHz spectrum is liberated. Brazil is among the countries with the highest 5G speed, due to the operators' 100 MHz band in 3.5GHz. The time a 5G user spends connected to 5G is still low (13%). The 3 operators may have different strategies to balance the growth in covered cities, with network availability.
- SA 5G for the consumer:: Anatel's requirement for SA 5G made the 3 operators accelerate the implementation of the new 5G "Core". Users who have an SA smartphone and a SA5G "chip" will experience higher uplink speeds, longer battery life, and faster connection and transfer speed. New services will depend on the deployment of multi-access edge computing (MEC).
- Private Networks: Physical or virtual private networks (slicing) are the way to offer new services to the B2B market. It is, however, a slow process, which has to be developed for the many segments. Manufacturing, Logistics, companies and universities, Ports, Airports and Health appear as the ones with the greatest demand.
- Regional Operators: Brisanet is the only one among the regional 5G providers that intends to put a 5G network into commercial operation in 2023. The others intend to leave the implementation of their 5G network for later and start offering services such as MVNO or offering private networks . The offer of fixed broadband with 5G (FWA) is difficult due to the cost of equipment at customers' homes (CPE).
- Fiber Networks
- Accesses and speed: Fiber accesses showed an annual growth of 20% in Oct/22 (+ 5.3 million), representing 66% of broadband accesses in Brazil. This growth may continue in 2023, boosting the contracted average speed, which was greater than 250 Mbps in Oct/22, and stimulating the adoption of WiFi 6.
- Consolidation: The consolidation process of fixed broadband providers occurs in all company sizes and will continue in 2023. Alloha and Brisanet already have more than 1 million customers and it is possible that others, such as Desktop, Vero and Unifique surpass this mark in 2023.
- Open Networks: The infrastructure companies V.Tal, FiBrasil and FiberCo created by Oi, Vivo and TIM respectively, to enable the expansion of their fiber networks, will have their trial in 2023, when it will become clear to what extent they can expand their base of customers in addition to your anchor customer.
- Norte Conectado. The deployment of subfluvial cables in the Amazon is likely to continue in 2023, connecting municipalities where Internet is precarious. Besides the activation of Infovia 01 (Santarém - Manaus), it's planned the implementation of infovias that will allow connecting Manaus to Boa Vista and Tabatinga and also Macapá to Belém. The resources are assured by the 5G auction.
- Oi's Challenge
- Fixed Telephony Concession: Anatel estimated at R$ 12.17 billion the value for Oi to migrate to the authorization regime in fixed telephony, but there is an arbitration process in which Oi asks for R$ 16 billion in compensation due to the economic-financial imbalance of the fixed telephony concession and economic sustainability of the service.
- Oi Mobile: Arbitration with Claro, TIM and Vivo, who want a reduction of R$ 3.2 billion in the final price of Oi Mobile.
- Debt: Renegotiate gross debt of R$ 34 billion with creditors.
- New Oi: How to increase revenue and have profit again? How to increase the EBITDA margin, which reached 6% in 3Q22?
- Other themes: growth and consolidation of fiber companies
- IoT: The implementation of Internet of Things solutions grows in Brazil at a rate of 20% per year, but this is a gradual process, as the solutions are different for each market segment. Logistics, Smart Cities, Industry and Agribusiness have been the areas with the greatest demands and 5G paves the way for new applications. Brazil had 39.2 million M2M devices in Oct/22, 17 million of which for IoT (growth of +20% in 1 year).
- MVNO: They continue to grow in number and accesses and, in Oct/22, were responsible for 1.4% of cell phones in Brazil. They initially focused on the B2B (M2M) market, but are expanding their operations to retail.
- Satellites: The offer of broadband access through low orbit satellites, such as Starlink, or medium orbit satellites, such as O3B, may expand the range of solutions for serving remote locations not connected by a terrestrial network.
- Metaverse: Meta (Facebook) has been the company pushing investments in the Metaverse (more than US$10 billion a year) in the hope that VR and AR will become the next big computing platform and that the company will lead it. 2023 will be a decisive year for the continuity of investments. The universe of virtual reality is currently dominated by Games and only 6G can enable a massive Metaverse.
You could ask:
- Will 2023 be better than 2022 for Brazilian telecom sector?
- How will coverage and number of accesses with 5G technology evolve in 2023?
- Will open network companies expand their clients bases?
- What will happen to Oi in 2023?
- What other theme will be a highlight in 2023?
