Brazil telecom market to return to modest growth

The current Brazilian economic crisis, regulation imbalances for smaller operators, high tax burdens for telecom services, and spectrum and cost limitations for broadband services continue to dampen growth in the Brazilian telecommunications services market, which saw USD 40.35 billion in revenue in 2015. According to Frost & Sullivan, there was a 31.4 percent drop in revenue last year due to the depreciation of the local currency, but the forecast is of moderate growth over the next few years, with estimated revenues of USD 46.99 billion expected by 2021, mainly driven by the increasing penetration of pay TV and broadband.
Services providers that are growing above market, such as regional player Algar Telecom and global players like Level 3 and Orange Business, are emphasizing customer service, innovative business strategies and network expansion, according to the market researcher.

While mobile data, FTTH and IPTV revenue services have double-digit growth compared to 2014 (30%, 90.8%, 58.1%, respectively), mobile and fixed-voice services presented significant drops of 11.1 percent and 4.6 percent, respectively. Causes for these drops are related to decreasing mobile termination rates, cost reduction initiatives by consumer and enterprises due to the economic situation, as well as substitution for other types of communication, such as messaging and unified communication & collaboration solutions.

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