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Smaller carriers, ISPs outpace big telcos in Brazil telecom revenue growth

Bnamericas Published: Monday, November 28, 2022
Smaller carriers, ISPs outpace big telcos in Brazil telecom revenue growth

Non-nationwide operators and the biggest internet service providers (ISPs) have been spearheading telecom revenue growth in Brazil, outpacing large local telcos.

According to an analysis by consultancy and research firm Teleco, Brazil's ISP Desktop led the market in net revenue growth in Q3, up 99% year-over-year, followed by Vero (up 82%), Unifique (47%) and Brisanet (34%).

Telefônica Brasil, Claro and TIM, in turn, grew their net revenues by 9.3%, 9.9% and 24.4%, respectively. Oi's sales, in turn, tumbled 38.7% due to the sale of its mobile unit.

Teleco put year-over-year growth in total net revenue from telecom services in Brazil at 6.4% in Q3, and 17.3% from the so-called competitive operators (non-nationwide carriers and ISPs).

In total, that means net revenue of 40.6bn reais (US$7.54bn) in the quarter from the general market, and 7.4bn reais from the six ‘competitive telcos’: Algar, Brisanet, Desktop, Vero, Unifique and Alares.

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Both for competitive telcos, and especially the large local incumbents, this revenue growth has been mainly inorganic. In the case of the former, it comes largely from the acquisition of smaller ISPs, whereas in the case of large telcos it follows their purchase of Oi's mobile operation.

Eduardo Tude, head of Teleco, told BNamericas he does not believe, however, that this represents the beginning of an organic slowdown in market share growth of the smaller operators, nor of a substantial slowing for the incumbents.

In absolute figures, market leader Telefônica Brasil led in net revenue with 12.2bn reais in Q3, followed by Claro (10.8bn reais) and TIM (5.6bn reais).

ALSO READ Spotlight: The state of play in Brazil’s telecoms industry 

Telefônica Brasil leads in mobile revenue (8.5bn reais in Q3) while Claro leads in fixed services (4.9bn reais). 

Teleco estimates net mobile service revenues in Q3 at 19.8bn reais, up 7.9% year-over-year, and net revenue from fixed services at 20.8bn reais, up 4.4%, with 18% coming from competitive telcos.

In fixed broadband, Teleco said market revenues were 13.4bn reais.

In fixed services, Telefônica Brasil and Oi are neck-and-neck in second place, despite, like Sky, losing market share in the period.

In pay TV, Claro continued to lose market share in Q3 to Sky and Oi.

The segment saw net revenues of 3.9bn reais in the quarter, down 8.9% year-over-year, according to Teleco's estimates.

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