The consolidation speeds up Paid TV's growth?
Brazil ended 2007 with 5.3 million Pay TV subscribers and density and 2.8 subscribers/100 inhab. The service is working on 17.6% of the 30.4 million brazilian homes.
The penetration of Pay TV in Brazil is low and is distant of countries as Portugal which has densities of 18.2 subscribers/100 inhab and 34.9 subscribers/ 100 homes.
The growth of Pay TV has been speeding up in the last years. The base of subscribers grew 16.7% in 2007 with net adds of 765 thousand subscribers.
The consolidation of "players" in this segment contributed to this growth. Net, Sky and TVA are the main Pay TV operators of Brazil.
Note: Net including BIGTV
Net joined Vivax in 2007 and with the acquisition of BIGTV, announced in Dec/07, has 48% of the Pay TV subscribers.
Sky, leader in satellite Pay TV (DTH), has grown in 2007 with the joint venture with DirecTV. DTH had net adds of 283 mn subscribers in 2007.
Note: UHF is the service that Anatel calls TVA
Also Contributed to this growth the entrance of Telefonica in this segment with the acquisition os the operations MMDS of TVA and DTH license.
In the end of 2007 the subscribers of Pay TV in Brazil were distributed: Cable TV (60.3%), DTH (32.9%), MMDS (6.5%) and UHF (0.2%).
Net, which is controlled by Globe and Embratel, has based its strategy work on "triple play" with the offer of Pay TV, broadband and VOIP telephony (Net Phone). It can have a higher revenue per user than operators that offer only Pay TV as SKY. Net's ARPU in the 4Q07 was R$ 131.
In order to also offer "triple play" services, fixed telephony operators has sought acquisitions in this segment (Telefonica and Oi), or partnerships, such as Sky with Brasil Telecom. The entrance of fixed telephony operators in this segment find some restrictions in the current regulation (more details).
The segment of Pay TV in Brazil is undergoing transformations in which local competitors are being consolidated into national "players". The expansion of the number of operators disputing the market nationally will be important for the growth of the sector. New technologies such as IPTV and applications such as Mobile TV may expand the horizon of Pay TV offers in Brazil.
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