How much will cellular grow in Brazil in 2013?
Brazil ended 2012 counting 261.8 million mobile accesses and density of 132.7 cell./100 inhab. The growth of 8.1% was the smallest since the implementation of cellular in Brazil.
The trend pointing to low growth continued to exist in the first two months of 2013. According to Anatel's preliminary data for Feb/13, cellular increased 6.2% in the last 12 months.
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In 2012, the drop in net adds occurred in May and is being extended in 2013.
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Net adds reached 482 thousand mobile accesses in Jan/13 and 750 thousand in Feb/13 (preliminary data) were very inferior in comparison with Jan/12 and Feb/12, but close to the ones gotten in Oct/12 (445 thousand) and Nov/12 (738 thousand).
The change in the rule to shut off prepaid subscriptions introduced by Vivo, reducing this period to 60 days, contributed to the reduction in net adds registered in 4Q12 and in the first two months of 2013. However, it's not the main factor to cause this reduction in growth rate.
Teleco estimates in 1.4 million cellulars the increment in Vivo's cancellations in 4Q12, after the application of this rule. In other words, without this change performed by Vivo, Net adds in Brazil in 2012 could have reached 20.9 million cellulars and not 19.5 million actually happened.
The main reason for the drop in growth rate seems to be the fact that sales (gross additions) stopped to increase in 2012, while cancellations continued to grow. Note that the same occurred in 2006 and 2009, years that showed drop in the value of annual net adds when compared with the value gotten the previous year.
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In one side, high cellular density could have reduced the space for growth of gross adds. On the other side, cancellations continue to grow, encouraged by the cleanings in prepaid base promoted by operators, such as Vivo.
Cellular in Brazil goes through a moment of transition initiated in 2012 and that may continue in 2013, like what already happened in other countries that reached cellular densities similar to the one Brazil is showing now, like Russia, Italy, Argentina and Germany.
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In this scenario, it becomes harder to make projections about cellular growth in 2013.
The impact is smaller in postpaid growth. it's likely that net adds inside this segment, in 2013, stay between the 8.2 million registered in 2011 and the 6.9 million gotten in 2012.
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In prepaid, the situation is different. The net adds showed in the 2nd semester of 2012 reached only 1.6 million prepaid subscribers.
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Kept this current trends, prepaid net adds in 2013 may be inferior to the 8.4 million registered in the last 12 months.
In this scenario, cellular would grow 5.7% in 2013, with net adds of about 15 million clients.
The trend of low growth in prepaid may be reversed in the medium term after the process of base adjustment/cleaning carried out by operators. It can happen still in 2013, what would implicate in bigger growth in comparison with what was projected based on the current trends.
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