The Brazilian total telecommunications services market has been growing considerably, with broadband, VoIP, and mobile telephony markets pushing revenues growth.
Moreover, the convergence of voice, data, and video is presenting several opportunities for growth and it is expected to drive the telecommunications market, as triple play offers penetrate in lower end users.
New analysis from Frost & Sullivan Brazilian Total Telecommunications Services Market, finds that the market earned revenues of $58,266.6 million in 2006 and estimates this to reach $74,280.4 million in 2012.
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“Traditional telephony is declining due to fixed to mobile substitution, as well as the adoption of new technologies such VoIP, which produces considerable impact, mainly over the long distance market,” explains Ignacio Perrone, Team Leader for the Telecom Services group at Frost & Sullivan “Nevertheless, local and long distance telephony still figure as the main telecommunications services, having generated 46.2 percent of the total revenues in the telecommunications sector during 2006.”
However, mobile telephony services are set to take over telecommunications sector service, as it exceeds fixed telephony in terms of traffic and revenues generated.
Together, fixed and mobile telephony continue leading the telecommunications market with 84.8 percent of revenue.
In regard to the broadband service, it is expected that operators’ campaigns to foster penetration among lower social classes will drive it’s growth, while VoIP services are likely to grow especially among heavy voice services users.
Consequently, the competitive structure has been changing due to telecommunications convergence. Carriers are looking for opportunities to expand their business by bundling voice, data, and video, in order to address the triple-play demand and protect the voice market from VoIP and pay-TV operators’ approach. Several carriers are keen on establishing partnerships or even acquire other companies to offer triple-play services.
With the main competitors participating in various services markets, there is an opportunity for them to explore possible synergies among services. In addition to that, companies are expected to target the fastest growing segments (SME and low end users), in order to expand market penetration.
This is a viable opportunity since telecom services have already reached saturated rates in higher social classes (people and residences) and among large and multinational companies.
“Operators with high operational capabilities and synergy among their services markets are expected to take best advantage of market growth, being able to address the triple-play demand and provide customized services plans for the low-and high-end users,” remarks Perrone.
The first company that kick started this market trend was Net Services in partnership with Embratel. After this initiative, Telefonica acquired part of TVA operations in the pay-TV segment and Oi expanded its business, acquiring the Way TV operator.
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