Brazil Wireline and Wireless Statistics and Forecasts 2010-2020

Quantum-Web’s latest report forecasts stable, steady mid-term growth for Wireless in Brazil.  We predict that wireless subscriptions will grow from 280 million to 334 million in the next five years to 2020, a compound annual growth rate of 2.5% (Figure1) taking the wireless penetration per 100 inhabitants from 137% in Q4 2013 to 158% in Q4 2020.

At the same time, total wireless revenues will grow by 2.5% from $24 billion (US) to $28 billion.  4G is the fastest growing wireless technology and will be the engine of mid-term wireless industry, increasing its share of wireless connections from 0.5% now to 29.5% by 2020.

Figure 1: Brazil Wireless Market Share (2013-2020)

Brazil PR
Brazil’s telecom sector has been facing ongoing consolidation since 1998 when the government started to privatise the state owned incumbent, Telecom Brazil.  Market liberalisation has continued since then and a topical illustration is Oi’s recent announcement of its plans to buy Telecom Italia’s TIM Brazil.  If the deal goes through, there will be a reduction in the number of operators to three (Claro, Vivo and Oi / TIM).  Market consolidation for operators can mean more investment to upgrade their wireless network through borrowing, selling assets or M&A and higher pressure on margins. For customers, once less operator could have a detrimental impact.  Studies suggest that four operators is the right number for optimal market conditions from the consumer’s perspective in terms of innovation, quality and cost competition.

The Brazilian telecom market still presents an attractive opportunity for investors, both strategically, as above, but also tactically.  Quantum Web analysis shows that positive market environment conditions mean that the demand for telecom services in Brazil is nearly inelastic to the variation of prices.  We have much more to say about Telecoms in Brazil and encourage you to get in touch.