How will 4G affect the fight for market share in Brazil?
TIM led cellular growth in the last two years with strategy focused in mobile voice. The carrier got to win market share and took the second position in cellular m. share from Claro.
The space for growth of voice revenue is, however, shrinking and mobile broadband is becoming the way to increase cellular operators' revenue.
In 1Q12, vooice revenue grew 7.9% over 1Q11, while data revenue increased 44.2%. Data revenue represented 20.5% of the cellular net revenue (26.8% at Vivo) in 1Q12, against 16.2% in 1Q11 (Vivo 22.5%).
Vivo and Claro are the operators that hae more investments in mobile broadband in Brazil. Claro ia the leader in accesses via 3G handsets and Vivo in data terminals.
Two operators have advantage by offering 3G+ (HSPA+) with speed from 3 to 6 Mbps in all its 3G coverage.
Vivo is the leader in 3G coverage, reaching 2,831 of the cities (84.6% of the population) in May/12.
| cities | 2008 |
2009 |
2010 |
2011 |
May/12 |
| Vivo | 314 |
579 |
1,206 |
2,585 |
2,831 |
| Claro | 282 |
389 |
402 |
657 |
890 |
| Tim | 23 |
55 |
195 |
488 |
539 |
| Oi | 99 |
168 |
211 |
250 |
320 |
| Total | 448 |
711 |
1,287 |
2,702 |
2,976 |
In this scenario Vivo, Claro, TIM and Oi participated in the auction promoted by Anatel and acquired the frequencies in band 2.5 GHz for 4G in the whole country.
R$ million |
Acquired frequencies | |
| Vivo | 1,050 |
Band X (20+20 MHz) in all the country |
| Claro | 988.8 |
Band W (20+20 MHz) in all the country 19 plots of band P |
| TIM | 382.2 |
Band V1 (10+10 MHz) in all the country 6 plots of band P |
| Oi |
399.8 |
Band V2 (10+10 MHz) in all the country 11 plots of band P |
The result of the auction reinforces Vivo and Claro's positions in the fight for the leadership in mobile broadband in Brazil.
It's possible that until the end of 2012 these operator have started to offer 4G in some cities. The commitment with Anatel stablishes to offer it, until April/2013, in the six cities that will host the Confederation Coup (Belo Horizonte, Brasília, Fortaleza, Recife, Rio de Janeiro and Salvador) and until Dec/13 2013 operate it in the twelve cities hosting the World Coup (the cities of the Confederation Coup plus Cuiabá, Curitiba, Manaus, Natal, Porto Alegre and São Paulo). The initial 4G coverage wil be small, but 4G devices can operate in 3G+ in places in which 4G isn't yet available.
Start to offer 4G in the country before other operators can be a good market strategy reinforcing the company image as "innovative operator" and making its brand stronger. The adoption of the service may be, however, slow and start by the use of modems due to the high cost of 4G smartphones. There is the estimation that until the end of 2012, there were 50 million 4G cellulars in the world, which is a slam figure when compared with 891 million 3G cellulars (WCDMA) that existed in the world by the end of 2011. Production is one of the main factors that caused the drop in smartphones price.
When the first 3G networks started ti operate in Brazil in the end of 2007, there were 179 million 3G mobile accesses (WCDMA) in the world. Even so, in 2008, 3G was used initialy for modems access. Just in 2010, when there were already 638 million 3G cellulars in the world, accesses via 3G handsets rocketed in Brazil.
Source: Huawei Whitepaper
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