Vivo trials 3G service, while Brasil Telecom prepares to launch

31 Aug 2004

Vivo, the wireless joint venture between Telefónica and Portugal Telecom, has launched a trial of Motorola’s CDMA2000 1xEV-DO solution over its network in Curitiba, Parana State. The new technology will enable peak speeds of up to 2.4Mbps, giving customers high speed access to real time services such as e-mail, the internet and music downloading. Vivo launched on 8 April 2003 and now operates in 19 states as well as the Brasilia federal district, covering around seven million square kilometres. The Vivo brand has become quickly recognised throughout Brazil and it was by far the biggest mobile operator in the country at the end of June 2004 with 23.51 subscribers.

The market is set to see further change with fixed line company Brasil Telecom revealing plans to launch a GSM mobile service in September. From launch it will have coverage of 82% of its current 30-million fixed customer base and hopes to sign up 400,000 wireless users by the end of the year. The operator has been seeking to enter the mobile sector since winning three D-band licences in March 2001, and in April 2003 announced plans to roll out wireless services by the end of the year. It was not until January 2004, however, that Anatel agreed it had met its fixed line rollout requirements and could therefore have permission to enter the sector. Under Brazilian telecoms regulation, operators are not allowed to own more than one mobile carrier per region – a rule which prompted former Brasil Telecom parent Telecom Italia Mobile (TIM) to lower its stake in the fixed line telco from 38% to 19.9% to enable it to launch its only mobile unit TIM Brasil. TIM was looking to repurchase its stake in Brasil Telecom in an attempt to block the latter from launching its own mobile services but in March 2004 the anti-trust authority Cade ruled that it must withdraw from control of Brasil Telecom, as it would provide a threat to competition. In August, however, a federal court ruled that TIM be allowed back in, and it is currently trying to regain its stake again.

The Brazilian mobile market has seen considerable consolidation over the past few years, and at the end of 2003 was dominated by three major players – Vivo, TIM Brasil and Telecom Americas subsidiary Claro – and four smaller operators – Amazônia/Telemig Celular, Oi, Sercomtel and CTBC Telecom – compared to a total of 21 operators at the end of 2002. Brazil still lags behind its neighbours Chile, Mexico and Venezuela in terms of cellular penetration, although it is home to the largest mobile market in the region.

PriMetrica's Global Comms Database