Intel defends prepaid model for broadband universalization

- Tuesday, November 22, 2011

Intel defends prepaid model for broadband universalization

The prepaid model is the most efficient in accelerating both mobile and fixed broadband universalization in Brazil, US chip manufacturer Intel (Nasdaq: INTC) said in a statement.

According to Intel, the prepaid model reduces the total ownership cost of a broadband subscription to individuals and has been successfully employed in Asian countries like India, Indonesia and Thailand, and others in Africa with similar challenges to that of Brazil concerning the universalization of internet access.

The company believes that the adoption of the model, combined with the national broadband plan PNBL, for example, could quickly leverage broadband density within the lower-income segment, as occurred with mobile telephony.

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Intel also noted that operators could even boost revenues, as was the case in India, where the telcos that have embraced prepaid broadband are said to have registered a 30% increase in revenue.

"It is known that broadband penetration is proportional to an increase in the country's GDP, according to World Bank studies," Intel Brasil market expansion director Fabio Tagnin said during an Intel conference in Praia do Forte, in Brazil's Bahia state.

"Even being the third largest worldwide PC market, a high number of machines are not yet connected to the internet. We should establish a national and comprehensive plan that considers multiple solutions to lower the total cost of having a broadband connection at home," he said.

Tagnin underlined that the lower-income segment is already used to the prepaid consumption model and thinks well of it.

"The concept is familiar, as the customer knows that the household monthly budget will be under control. What they want is a model where they can pay per day of access, very similar to how most of them already do in cyber cafes. With this level of control of the internet budget, the home broadband connection becomes a tangible reality very quickly," said Fabio. "It's an option that would complement the current PNBL, giving greater freedom to the consumer."

The latest data released by telecommunications union Telebrasil showed that broadband accesses in Brazil neared 54mn in October; 16.3mn correspond to fixed broadband and 37.6mn to mobile.