Karolina Puin

Karolina Puin


The Brazil Business

Updated

VespaTS

Mobile Growth in Brazil

Karolina Puin

Karolina Puin


The Brazil Business

Updated

Since its appearance in the world, the market for mobile devices has presented an ever increasing growth, but is the Brazilian government keeping up the rhythm? Is everyone really included?

The mobile market in Brazil

The Brazilian mobile market started in 1972 with the IMTS (Improved Mobile Telephone System), a technology older than the one used in the manufacturing of cell phones. It was initially implemented in Brasilia, but the service was not focused on the mass population. There were only 150 terminals available.

Twelve years later, the AMPS (Advanced Mobile Phone System) technology started to be studied, but only arrived in Brazil in 1990, through the Americans, and in 1991 the mobile company TELEBRASÍLIA started to manufacture their first mobile devices.

After 1993, the Brazilian mobile market suffered many changes as the first digital cell phone was being inserted in the market and other mobile technologies started to appear. After the year 2000, the growth increased every year and did not stop until nowadays.

According to ANATEL (Brazilian FCC) in 2011, the number of mobile devices in Brazil exceeded the country's population. 83% of this number is composed by prepaid cell phones, what can be a good deal, as you only spend what you have already paid for, with no unpleasant surprises at the end of the month. However, the cost per minute for this kind of plan is so high that nowadays it is common to see a person with two or three different devices.

In Brazil, it is common to have more than one cell phone due to the expensive rates charged by mobile operators for calls made between them. The solution found was to sign up with different mobile operators, seeking for different discounts. Mobile devices that allow more than one SIM card are also very popular in Brazil, as they allow access to different mobile operators at the same time by using only one device.

Supporting the demand

In 2010 there were some changes made by ANATEL in order to support the mobile demand. In Brazil, only household telephone numbers started with “5”, but last year mobile companies were allowed to use numbers starting with "5" for their mobiles.

Brazilian telephone numbers usually have eight digits, but due to the mobile booming in São Paulo, every cell phone in the metropolitan area of the city will have nine digits, starting in July.

This measure will provide more than 50 million new combinations of numbers to support the mobile expansion. However, such expansion does not comprises the entire population, so the government is working on plans to promote the mobile inclusion.

Mobile inclusion program

The Brazilian government is trying to implement a new social program in the country, which has as the main purpose to offer cell phone and internet plans for R$30,00. The point is: people in Brazil have access to prepaid mobiles, so why would such plan be interesting?

Mobile operators also offer prepaid plans that allow you to recharge your cell phone accordingly to the amount that suits you better. However, the prepaid minute is really expensive, being much higher than what is charged by postpaid plans. Such thing happens for one simple reason: If your credits run out faster, you will have to recharge your phone, spending more money, transforming what is presented as a good deal into something more expensive than it really looks like.

In order to turn the mobile access easier and cheaper to low-income people, the government is trying to make partnerships with mobile operators, reducing tax rates and granting tax exemptions, if necessary.

These partnerships are being studied to reduce the minute pricing and the general cost for data transfer. The main point of each inclusion program is to promote access to a plan that people could afford, providing enough minutes and data transfer until the end of the month.

How is it going to work?

The main point of the program is to provide accessibility to people belonging to classes “C”, “D” and “E”, but it does not include everybody. The mobile inclusion will be part of already existing social programs, like Bolsa Família, for example. Only families already included in government's social programs will be able to participate.

The program is a part of initiatives to provide accessibility. Last year, the federal government and ANATEL made partnerships with landline companies, offering a “social phone”, that will cost only R$13,00 per month. This measure will become mandatory soon, the government is only making the last adjustments to the law.

Thinking from a social point of view, these measures are really important to people that could not be part of the globalized world otherwise, as prices for telephony services can be very high. However, as these programs are a partnership with private companies, those who can not afford a regular cell phone in Brazil but are not included in a social program will remain in the same situation, unable to actually join the digital world.

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