Brazil telecom market forecast to grow 20% by 2022
The Brazilian telecom market is expected to expand 20.4% between 2016 and 2022, reaching US$45.7bn in annual revenues at the end of the period.
The forecast comes from consultancy Frost & Sullivan, which says in its Brazilian Total Telecommunications Services Market Outlook report that the CAGR could be higher if there were not for some challenging characteristics in the local market.
The consultancy cites, specifically: economic uncertainty, high taxes, fierce competition and decreasing profitability, as well as the overall shortening of technology cycles.
Frost & Sullivan says that while revenues of most carriers are declining, there are opportunities in non-traditional telecom services such as internet of things, business process management, big data analytics and smart applications.
"To succeed in these non-traditional services, companies must rethink their organizational structure and their portfolio, focusing on their digital and innovation strategies to reinvent business operations and enable new services. The main elements of the digital transformation for telecom companies are self-service, agile IT and vertical solutions," said Carina Gonçalves, Frost & Sullivan's digital transformation industry analyst.
DATA UP, VOICE DOWN
Breaking the forecasts down by segments, residential telecom services are poised to see CAGR in 2016-22 of 4.2%, according to the consultancy.
Meanwhile, on the corporate side, sales to SMEs are expected to fall 0.5%, while the projected decline for large corporates is 3%.
Fixed broadband revenues are expected to see 8.1% CAGR in the period, followed by pay TV, mobile and data communication services with 4.3%, 4.1% and 1.9%, respectively. Fixed telephony revenues, in turn, are forecast to contract by 5.9%.
Non-voice services, especially mobile data (3G and 4G), should continue to propel growth in the period, said Frost & Sullivan, with voice revenues steadily declining.
Device revenues and value-added service (VAS) revenues are expected to see CAGR of 17.9% and 16.3%, respectively, driven by increased mobile data usage.
COMPETITION
According to the firm, the three largest groups in Brazil – América Móvil, Telefónica and Oi – accounted for 74.9% of market revenue in 2016.
Over-the-top (OTT) providers will tend to impact customer demand scenarios in the future. At the same time, telcos are still struggling to monetize their own OTT, VAS and cloud services, said the consultancy.
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