Biggest part of the cellular gross adds is composed of clients who exchanged operator
Cellular operators are engaged in a daily battle to conquer new clients.
However, while a operator gains new costumers (cellular gross adds), clients also leave the company (cancellation of cellulars).
In order to calculate the net adds, which represent how much operator's base effectively grew in a certain period, it's necessary to deduct the number of cancellations from the gross adds.
In 2008, gross adds of cellular operators in Brazil counted 72.9 million cellulars and 43.4 cancellations. Net adds, which represent new cellulars added to the Brazilian cellular base, reached 29.5 million cellulars.
In other words, the biggest part of the cellular gross adds gotten by operators was a result of clients who came from other operators. It happens since 2006 when net adds started to represent less than 50% of the gross adds.
Note: Percentage relation between Nei Adds and Gross Adds.
The high percentage of prepaid cellulars (>80%) and GSM "chips" contribute to the high churn (cancellation rate) presented by cellular operators in Brazil. In the United States, for example, cellular operators' monthly churn is smaller than 2%.
| Operators | Cellulars |
2008 |
|||
2007 |
2008 |
Gross Adds (millions) |
Annual Churn |
Net Adds (millions) |
|
| Vivo | 37,385 |
44,945 |
19,225 |
31.2% |
7,561 |
| Claro | 30,228 |
38,731 |
18,297 |
32.4% |
8,503 |
| Tim | 31,268 |
36,416 |
17,400 |
39.2% |
5,148 |
| Oi | 17,401 |
24,388 |
13,532 |
37.6% |
6,989 |
| BrT | 4,263 |
5,605 |
4,471 |
73.4% |
1,342 |
| Brazil* | 120,980 |
150,641 |
72,925 |
35.9% |
29,661 |
*includes CTBC and Sercomtel
In this climate increases the importance of number portability, even though it is still not widely used by clients who exchange cellular operator. Teleco estimates that only 3.7% of the cellulars, which had switched operator in March/09, ported their numbers. It might indicate that the majority is composed by prepaid cellulars with low use and for them changing number isn't a big deal.
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