Over the past few years, digital infrastructure investments and a burgeoning middle class have driven consumption of telecom services in Brazil. However, the country’s recent economic turmoil had led to sharp contraction in consumer spending on telecom services in what is the largest Latin American telecom market. In fact, from 2014 to 2016, consumer expenditure on telecom services presented flat growth, with CAGR of 0,6%. Rising competition and the country’s economic problems also have taken a toll on mobile revenues.

Mobile connectivity in particular is a key segment for Brazil as it has greater penetration than home connectivity due to wider coverage of basic voice services and spread of mobile broadband in urban areas. Mobile operators continue to get a significant proportion of their revenues from voice and SMS services, primarily from pre-paid subscribers. However, this revenue segment has been hit by economic problems and shift to IP-based messaging services and operators are increasingly investing in 4G LTE to cater to the higher income data-consuming consumers.

In addition, Brazilian consumers are some of the highest social media users globally and WhatsApp is the top social messaging app in the country. In fact, Brazil was the leader among 20 markets covered by Euromonitor’s Global Consumer Trends Survey 2016 in terms of visits or updates in social networking sites daily. Greater social media engagement has also driven brands to devise strategies that target young consumers through social networks. Activities such as new product launches are announced on social media, which helps effective communication with end-users. However, as social media emerges as an important avenue for reaching consumers, it is important for brands to move beyond viewing these platforms as merely a consumer service portal to instead building a brand presence that will enable it to engage with consumers throughout the purchase journey.

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