Mobile market booms as investment grows

5 Oct 2004

Brazil’s mobile market is hotting up, with both foreign and domestic investors looking to pump money into their operations in the country as subscriber growth soars. Major mobile player TIM Brasil, a subsidiary of Telecom Italia Mobile, has revealed plans to plough USD2.5 billion into its operations in the country during 2005/06, to increase coverage of its nationwide network and improve the quality of service; the operator hopes to take its customer base to 13 million by the end of 2004, up from 8.3 million a year earlier.

TIM is not the only major foreign investor looking to ramp up its spending in Brazil, however, and a record number of IPO’s have taken place over the last few months. Spain’s Telefónica Móviles and Portugal Telecom have announced that they will spend up to USD507 million to increase their shares in joint venture Brasilcel, which operates under the brand name Vivo, while Mexican giant Telmex recently paid USD400 million for a stake in Brazilian long-distance carrier Embratel.

The increase in investment has come hand in hand with strong customer growth in the mobile sector. According to the regulator Anatel, at the end of August there were 57.01 million wireless subscribers in the country, up 42% in a year; this figure is expected to rise to 69.8 million by the end of 2004. The main players in the sector are Brasilcel, TIM Brasil, and América Móvil subsidiary Telecom Americas, which operates under the banner Claro. Telemig/Amazonia Celular, CTBC Celular, Sercomtel and TNL PCS (Oi) are also prominent operators.

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