Will Vivo lose market share in 2008?
Vivo is the operator leader in market share in Brazil, position strengthened by the acquisition of Telemig Celular, which must take control until Mar/08.
Vivo reduced in 2007 the rythm that had lost market share. With the deployment of its GSM network and the reformulation of its market strategy Vivo added in the year 4.4 million cellulars in its base. In 2006 net adds were negative (752 thousand cell phones). Approximately 1/3 of the Vivo's cellulars were GSM at the end of 2007.
These results were followed by an improvement in its operational indicators and growth of 14.2% in gross revenue.
| Millions | 2006 | 2007 |
| ARPU (R$) | 27.2 | 30.4 |
| MOU (minutes) | 74 | 77 |
| Monthly Churn | 2.9% | 2.3% |
| SAC (R$)* | 118 | 106 |
* Cost of Client's Acquisition
However, Vivo showed damage of R$ 99 million in 2007.
Vivo led cellular growth in Dec/08 and could increase its market share from 27.60% in Nov/07 to 27.68% in Dec/07. With the acquisition of Telemig, Vivo started 2008 with market share of 30.9%.
What will happen with Vivo in 2008? Will it lose market share?
The results of January indicate that the competition in 2008 will be hard. Tim, Oi and Brt won market share in Jan/08, while Vivo and Claro lost. Tim surprisingly had 42.5% of net adds.
Vivo and Claro, which led net adds growth at Christmas, had low growth in January with the decreasing of the promotions based in devices. Tim and Oi, which clients acquisition strategy is in the offer of promotional minutes, presented stronger growth this month.
To don't lose market share in 2008, Vivo will improve performance in all regions.
Vivo Market Share (including Telemig) per Region
 |
- | 2006 |
2007 |
Jan/08 |
| Region I | 24.54% |
23.83% |
23.78% |
|
| Region II | 36.12% |
34.35% |
34.09% |
|
| Region III | 44.06% |
41.44% |
40.92% |
|
| Brazil | 32.52% |
30.90% |
30.66% |
Net Adds in Jan/08
| Millions | Region I |
Region II |
Region III |
Brazil |
| Vivo | 183 |
87 |
-43 |
227 |
| TIM | 397 |
203 |
200 |
800 |
| Claro | 128 |
52 |
109 |
289 |
| Oi | 382 |
- |
- |
382 |
| BrT | - |
157 |
- |
157 |
| Telemig | 54 |
- |
- |
54 |
| Amazonia | -35 |
- |
- |
-35 |
| CTBC | 7 |
1 |
- |
8 |
| Sercomtel Cel. | - |
-1 |
-2 |
-3 |
| Total Cellulars | 1,116 |
499 |
264 |
1,879 |
| Vivo/Telemig | 21.2% |
17.4% |
-16.3% |
15.0% |
Region I
Região I, which respond per 59.4% of Brazil's net adds in Jan/08, where Vivo got a bigger participation in net adds (21.2%). Vivo/Telemig (23.78%) occupies 3rd placement in market share in this region, behind Oi (27.03%) and Tim (26.54%).
Vivo can improve its market share in region I when start the operations in the Northeast states (area 10). Oi has gotten the best results in these states, specially in the local areas that include Fortaleza and Recife (more details).
With the sale of Amazonia Celular to Oi the 2.28% of the market share of this operator in the region I will be going to Oi and not to Vivo. The Amazonia showed negative net adds (-35 thousand) in Jan/08 having lost customers in all local areas (DDD).
Vivo surpassed Claro in net adds in the Region I. Claro, which occupies the 4th placing in the region (19.88%), led in Salvador (71) with net adds of 44 thousand cellulars (against 9.5 thousand of Vivo), but showed negative net additions (-3 thousand) in Rio de Janeiro (21).
Region II
Vivo, is leader in the region II with 34.09% of market share, grew less than Tim and BrT. Tim led growth in Jan/08 in Parana, Santa Catarina and Rio Grande do Sul and BrT in Central West.
Claro, 2nd placed with market share of 26.42%, was in 4th place in net adds, has submitted its worst performance in Rio Grande do Sul
Region III
Vivo, leader in Sao Paulo with 40.92% of market share, this region showed its worst performance in Jan/08 with net adds of -43 thousand phones.
Net Adds in Jan/08
DDD |
Vivo |
Claro |
Tim |
CTBC |
Total |
11 |
63,174 |
69,504 |
131,718 |
- |
264,396 |
12 |
(8,588) |
4,027 |
10,515 |
- |
5,954 |
13 |
10,595 |
1,072 |
6,032 |
- |
17,699 |
14 |
(14,371) |
1,728 |
8,251 |
- |
(4,392) |
15 |
(10,634) |
1,420 |
3,614 |
- |
(5,600) |
16 |
(17,024) |
13,798 |
7,953 |
(1,898) |
2,829 |
17 |
(14,944) |
8,058 |
6,876 |
78 |
68 |
18 |
(16,224) |
2,950 |
5,198 |
- |
(8,076) |
19 |
(35,311) |
6,636 |
19,572 |
- |
(9,103) |
SP |
(43,327) |
109,193 |
199,729 |
(1,820) |
263,775 |
Vivo lost customers on 7 from 9 local areas (DDD) in which the state is divided. In the area of Campinas (19), Vivo presented its worst result with net adds of -35 thousand phones.
The problems of Vivo should worsen in Sao Paulo in the second half of 2008 with the entrance of Oi operations in the state.
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