Telecom companies are expected to witness a hike in mobile telephony revenues with the higher uptake of mobile broadband services, while the convergence of technologies and services will raise the standard of competition in the market.
New analysis from Frost & Sullivan (ipcommunications.frost.com), Brazilian Telecommunications Service Market, finds that the market earned revenues of $70.54 billion in 2008 and estimates this to reach $88.04 billion in 2014, mainly driven by mobile telephony and new technologies and services.
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"3G technology enables mobile operators and software developers to improve revenues with advanced applications and data traffic," says Frost & Sullivan Research Analyst Bruno Neto. "The convergence of services is also expected to improve the penetration of telephony, broadband, and pay TV services in all social economic strata."
This emergence of triple and quadruple play services, driven by new technologies, will catalyze market growth. Already, six mobile operators provide 3G services in Brazil, four with national coverage. These new service and technology additions to the telecommunications service market have improved the quality of services, reduced the cost to the end user, and helped acquire customers in distant geographical areas.
To make further inroads in the market, telecommunication service companies have to strategize to deal with regulatory barriers, as they impact the cost of the infrastructure and quality of the services provided.
"The unavailability of spectrum, high taxes, and the delay of the local regulator in defining competition issues are likely to impact the cost of investments and the development of new services and technologies," notes Neto. "This is a significant hurdle since the penetration of new services and technologies in far flung areas relies on the competition stimulus that provides alternatives for services and rewards efficient companies."
The lack of competition in some areas and segments could slow down service adoption and inhibit the development of innovative technologies and services. Telecom operators can circumvent this scenario by investing in new technologies, network capability, and strategic partnerships. These moves will enhance competitiveness and provide more services and alternative plans, thereby helping to minimize regulators' delay.
Telecom operators need prior network investments to generate revenues from convergent and advanced services, as the funds allow the operators to innovate and provide converged services that help retain top-tier clients. End users' investment capacity and purchasing power are improving, and the recovering economy is fostering greater demand for telecommunications.
Telecom operators are likely to use the investments obtained from service providers to strengthen their infrastructure and coverage, while the swelling rural demand and escalating penetration of PCs, fueled by Government programs, are greatly boosting Internet access demand, thereby bringing in revenues.
Market entrants will feel hopeful of their chances as the entry of technologies such as voice over Internet protocol (VoIP), Worldwide Interoperability for Microwave Access, Inc. (WiMAX), and IP-based technologies push prices down and offer them a more level playing field.
"Meanwhile, pay TV digitalization, which expands networks' capacity, improves services and multichannel multipoint distribution service's (MMDS') competitiveness against cable TV, giving thrust to the telecommunications service market," remarks Neto.
Brazilian Telecommunications Service Market is part of the Communications Services Growth Partnership Service program, which also includes research in the following markets: Latin American broadband services markets, Latin American pay TV services markets, and Latin American data communications services markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Brazilian Telecommunications Service Market / N444