Boston, MA -- (ReleaseWire) -- 01/08/2014 -- The launch of the first 4G LTE services in Brazil in H113 was an important development as the market moves towards next generation services. Alongside LTE, operators are also developing value-added services such as M2M and m-commerce as the market matures beyond a prepaid centric environment of subscription acquisition maximisation. Brazil has a high mobile penetration rate, but with MVNOs set to enter the market in 2013 we expect growth to continue over the medium term. However, it will be at a slower pace compared with 2011 and 2012, as operators push into the last remaining untapped rural areas. In the broadband market, Anatel has been active in trying to enhance competition, reducing licence fees for operators wishing to provide multiple services. However, data from Telebras suggest the government's National Broadband Plan has been less than successful so far.
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- Mobile subscription growth slowed markedly in 2013, in part because of restrictions on selling new subscriptions early in the year, but also due to saturation as the penetration rate reached 133.9% at the end of September 2013.
- Strong broadband subscription growth continued, with total wireline subscriptions reaching 20.882mn at the end of September 2013, up from 18.591mn a year earlier.
Key Trends And Developments
There were several developments in H213 related to ownership and corporate structure of key operators in Brazil - Oi and TIM. In October 2013 Portugal Telecom announced its plan to merge with Oi to form a new company, CorpCo. Portugal Telecom outlined potential cost savings of BRL5.5bn from the merger -although BMI believes this may be over ambitious as both companies are facing highly competitive markets and slowing subscriber growth. Nonetheless, the government of Brazil stated in October 2013 it was relieved by the merger as it had been concerned over Oi's future as the operator had insufficient financing capacity in the medium term. The government expects Oi, which is considered to be oversized, to downsize. This will result in dividend reduction and more transparency in its decisions.
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