Brazil looks to 3G expansion

Brazilian telecoms regulator Anatel held auctions for third-generation (3G) mobile telephone capacity in December 2010. This demonstrates the growing maturity of the Brazilian telecommunications market, with consumers looking for added value in the form of 3G. The auction will result in increased competition in the sector, with positive implications for consumers.

  • The auction sold 13 licences for 10 Mega Hertz (MHz) spectrum blocks, with the entire sale valued at US$657 million. In an effort to encourage competition, preference for bidding was given to new entrants to the 3G market, rather than the established players. As a result, new entrant Nextel secured 11 of the 13 licences for a bid of more than US$700 million, giving it access to 97% of Brazil’s population
  • 3G uptake has been slow, with only 7.8% of the total number of mobile subscribers also subscribing to 3G, as of October 2010, according to Brazilian firm Teleco. 3G licences were first auctioned in late 2007, meaning that there is considerable potential for market expansion
  • In 2009, there were 3.2 mobile telephone subscriptions per household in Brazil, up from 1.3 per household in 2004. Mobile telephone subscriptions grew by an average 21.5% annually between 2004 and 2009 to reach 174.0 million. 3G offers a virtually untapped market of consumers looking to upgrade from mobile telephone services, which will provide considerable profits for businesses and a better service for consumers
Brazil’s mobile telephone subscriptions: 2004-2009
‘000 / per household

Source: Euromonitor International from International Telecommunications Union /World Bank/Trade Sources/Euromonitor International.


  • According to Teleco, as of October 2010, there were 16.9 million mobile 3G accesses, up from 10.5 million in January 2010. However, only 7.8% of mobile telephones are 3G enabled


  • The rise in demand for 3G services stems from both increasing infrastructure investment by telecoms firms and an improving standard of living in Brazil. Consumer expenditure on telecommunications services increased from US$15.2 billion in 2004 to US$40.9 billion in 2009
  • The expansion of 3G coverage nationally would benefit existing customers when travelling and potentially increase business profits for 3G handsets and services by opening up new markets beyond the established regions
  • More 3G operators will benefit consumers by increasing competition, potentially offering customers lower prices and cost-effective package deals. 3G is currently relatively expensive, largely owing to the lack of competition
  • Greater access to 3G mobile broadband is also a benefit in remote or rural areas of Brazil, where it can be difficult to establish fixed-line services. Eventually, expanding 3G networks will allow many consumers to access the internet who do not have fixed-line access. However, rolling 3G out across Brazil’s vast territory will be a lengthy and costly process for businesses.


Brazilian consumers will continue to move into 3G as standards of living improve and coverage expands:

  • Brazil’s economy is forecast to expand by 7.5% annually in 2010 and 4.1% in 2011, indicating that consumer demand for more expensive services and handsets will increase as the economic recovery consolidates
  • Telecoms businesses’ appetite for expansion will also increase as the economy recovers, especially if handset suppliers are able to meet increasing consumer demand
  • 3G will become an increasingly popular feature in the telecoms market, boosted by the growing number of middle-class households with greater discretionary spending potential, with the expense of rolling out support infrastructure being repaid by high potential profits. Mobile telephone subscriptions in Brazil are forecast to rise to 191.3 million in 2011, from 174.0 million in 2009.