Vivo's recipe to increase market share
Vivo resumed the leadership in mobile growth in Mar/10 with net adds of 1 million mobile accesses, almost the double of Tim's net adds (570 thousand) and Claro's (512 thousand). Oi reached the 4t position with net adds of 214 thousand mobile accesses. It's the 7th month in which Vivo leads mobile growth in Brazil (more details).
By this result, Vivo conquered the leadership in mobile net adds in 1Q10.
Over the last nine months Vivo recovered the market share lost in the first semester of 2009 and also reached market share superior than 30%, more than the amount gotten in 2008. In this period, Claro and Tim kept the same market share and Oi lost 0.8 percentage points.
What's Vivo's recipe to reach this result?
Vivo combined its leadership in market share, quality, coverage and 3G with competitive plans, in order to generate a cycle which reinforces its position as leader. This position strengthens Vivo's brand and results in a lower churn and consequently in the leadership in net adds. It leads to growth in the revenue, market share and profitability, increasing sources to investments which strengthen even more Vivo's position.
What can other operators do in order to brake this cycle?
Claro and Tim had already realized this movement and they are investing to improve services and by doing so compete with Vivo.
Claro launched service plans customized by the client, those plans are more flexible than the ones offered by Vivo, and is investing to improve the quality of its 3G network. By the and of 2010, about 60% of the cell sites inside its 3G coverage will be connected with fiber.
Besides increasing the focus in quality, Tim launched aggressive and innovative plans to resume growth in postpaid. The weak spot in Tim's strategy is still the low investment in 3G.
Oi faces the biggest challenges in this scenario. Oi's net adds in 1Q09 represented about 25% of Vivo's and 50% of Tim's and Claro's. Oi can lose the leadership in region I, because advantage which separates the company from Vivo in this region dropped to 410 thousand mobile accesses in Mar/10.
In Mar/10, Oi showed low performance even in São Paulo, where led mobile growth since the company started its operations in 2008. With net adds of 75 thousand mobile accesses, Oi is behind Vivo (194 thousands), Claro (101 thousand) and Tim (98 thousand).
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