09/10/2006

Can areas with high density stimulate MVNO and 3G in Brazil?

 

The implantation of 3G is current happening in countries with high cellular densities (More details). In these markets the revenue growth can't be supported by cellular's base growth, what takes the operators to invest even more in new services, as the ones gotten with the 3rd Generation networks.

 

Brazil finished Aug/06 with density of 50.8 cell/100 inhab, low density when compared with others Latin America countries (more details). In the “average” Brazilian market is still in growth phase, far from the period of stabilization that occurs from a density of 70 cell/100 inhab.

 

Brazil is, however, a country of continental dimensions and presents a not uniform distribution of densities when considered the 67 cellular local areas (exactly DDD) where the country is divided.

 

There are local areas with density bigger than 70 cell/100 inhab, that include cities as: Brasilia (61), Salvador (71), Porto Alegre (51), Florianópolis (48) and Belo Horizonte (31). And areas with densities lesser than 20 cell/100 inhab, in Amazonas (97), Pará (93), Maranhão (99), Piauí (89), Ceará (88), and Bahia (74 and 77).

 

 

Areas with more than 70 cell/100 inhab.

 

Five local areas presented densities bigger than 70 Cell/100 inhab in Aug/06. They are areas of reduced dimensions around a big city and 100% of the population is attended by the operators.

 

Code DDD	Main City	Leader (Market Share)	Cellulars (Thousands)	Cell/100 inhab	Growth. August
61	Brasília	Vivo (34.9%)	2,931	92.1	1.2%
71	Salvador	Oi (33.5%)	2,615	81.1	2.8%
51	Porto Alegre	Vivo (45.2%)	4,107	75.3	0.7%
48	Florianópolis	Tim (53.0%)	1,266	72.2	1.5%
31	Belo Horizonte	Oi (34.6%)	4,747	71.0	2.0%

 

In these five local areas are concentrated 16.5% of Brazil's cellulars. Although these areas can start to present a lesser growth that Brazil's average which was 2% in Aug/06.

 

In these areas the trend is the growth of the operators revenue, depending on new services offers. Some of the alternatives are:

• Implantation of 3G networks making possible the offer of datas services that use broad band through cellular.
• Invest in the substitution of fixed telephone per cellular with the implantation of plans , example " Tim Casa".
• Introduce mobile operators of virtual networks ( MVNOs) in the market of specific areas.

 

Areas with less than 20 cell/100 inhab.

 

Seven local areas presented densities lesser than 20 cell/100 inhab in Aug/06. They involve extensive areas where only part of the population is attended by the operators.

 

Code DDD	Main City	% Pop covered by the leader	Cellulars (thousands)	Cell/100 inhab	Growth. August
88	Juazeiro	72% (Tim)	753	18.2	4.4%
93	Santarém	61% (Vivo)	198	16.2	-0.5%
99	Imperatriz	60% (Vivo)	388	14.9	3.1%
77	Barreiras	50% (Vivo)	382	14.9	3.8%
74	Juazeiro	47% (Oi)	239	13.9	5.0%
89	Picos	34% (Tim)	109	10.0	4.9%
97	Coarí	32% (Tim)	34	3.5	2.8%

 

These local areas have presented a bigger growth than Brazil's average, which was 2% in August/06.

 

In these and other local areas, to invest in the increase of the covering is still a growth strategy. In August/06 cellular was available to 89.5% of the population of Brazil and Tim, operator with bigger covering, to 85% of the population.

 

 

Looking at the text above you could ask:

• Considering that 51.1% of the cellulars in Brazil are concentrated in 15 local areas with more than 60 cell/100 inhab, and in one year the density in most part of these local areas will have surpassed 70 cell/100 inhab, could be affirmed that is the time of 3G implantation in Brazil?
• Will have success a 3G implantation strategy in areas of high density (hot spots) as adopted by Vivo with EVDO?
• The proposal presented by Vivo in Futurecom 2006 the implantation of only one 3G network, to be shared by all the operators, is advantageous? For who?
• Which operators will need to acquire frequencies to implant 3G? 68% of the cellulars Band B are GSM and use sub-bands extension. Claro is the biggest Band B operator.
• The low density of São Paulo presents a curious case. Which is the explanation to area 18 (Presidente Prudente) to present 39.6 cell/100 inhab, lesser density than all the neighboring local areas? The covering of the leader Vivo in this area is 100% of the population, Claro 92% and Tim 88%.
• Could MVNOs also be used to make possible the attendance by the cellular operators of small cities and distant regions as Amazônia?

 

 

Comment.

 

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

 

Please let us know if you authorize its publication.

 

 

 

 

 

Workshop (in portuguese)

Cellular Market Update

 

 

• © 2025 Teleco    
• Legal Aspects
• Privacy
• Our Proposal
• Contact us