At Futurecom: A Peek at Brazil's Potential

10/27/2010

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6:50 PM -- SAO PAULO, Brazil -- As Light Reading editors lounge in Paris at Broadband World Forum and deliver comprehensive coverage of French tradeshow beverage selection (see BBWF 2010: Show Floor Drinkathon), here in Brazil at Futurecom the coffee is better, the economy is surging, the show is growing (attendance up 30 percent from first day last year according to the organizer, Provisuale), and the floor is abuzz about the prospects of significant telecom growth. From Day 2 at the show, here are five hot topics on carrier execs’ minds. As jet lag wears off, we’ll try for another five tomorrow on Day 3:

More spectrum, por favor: Mobile broadband using 3G networks is exploding, growing to $8.5 billion by 2015, up sixfold from $1.4 billion in 2009, according to Pyramid Research. But carriers need spectrum, spectrum, and more spectrum. Especially hot was talk about new 4G spectrum auction in 2.6GHz range which will be allocated to non-incumbents. This spectrum, currently allocated to pay-TV service, will be auctioned to non-incumbents, prompting a senior exec at a major carrier to wonder if new players will be subject to the same huge taxes that telecom companies have to fork over. “We just want a level playing field,” he said.

Here come the MVNOs: With Anatel, the Brazilian telecom authority issuing favorable regulations, there is a big expectation that non-telco players like banks and financial institutions will get into the mobile virtual network operator game, using current infrastructure. This has Service Provider IT players here like Telcordia licking their chops at the possibility of arming new players in the market with service creation and delivery smarts.

Getting big in Brazil: The major telecom players are going in big time. Just one example: NSN announced it's setting up its fifth Global Network Operations Center in Sao Paulo, and its first in the Americas. NSN, which claims it’s the LatAm managed services leader, announced it is investing 15 million euros on the facility that will host up to 300 technicians, who are responsible for managing up to 20 million subscribers.

IPTV opportunities: While fixed broadband penetration is relatively low (19 percent of households, compared to 30 percent in developed countries) incumbents are looking for video services to drive more revenues and ARPU, subject to that fairness concern in topic No. 1.

And the biggest buzz of all -- Brazil is back. The World Cup is coming in 2014. The Olympics in 2016. With GDP growth of 7.5 percent, Brazil has skipped the economic malaise facing much of the developed world. Indeed, by far the biggest applause on the opening night here at Futurecom was for ex-president Fernando Henrique Cardoso, who is largely credited for creating the stable economic environment for Brazil’s growth during his term in office from 1994 to 2002. Of course, in a particularly Brazilian touch, master of ceremonies Daniela Escobar, a Brazilian soap opera star, also received her share of the attention, proving that the Brazilians can win telco event style points, even against the French.

— Joe Braue, Group Director and SVP, Light Reading