4G in Brazil: Too much too soon?

The Brazilian mobile telecom market has long been thought of as a major growth opportunity, and the market is dominated by multinational telcos looking to leverage its potential. However, the outcome of a September 2014 spectrum auction, the second of its kind for 4G LTE allocation, was disappointing for the Brazilian government and one major market player, Oi S.A. (Oi), did not even participate.

Scope

  • Outlines the history of 4G mobile services in Brazil.
  • Assesses the process and results of the disappointing 700 MHz spectrum auction in Brazil.
  • Analyzes competitive aspects of the Brazilian telecoms industry.
  • Examines Oi's position in the industry and explores the factors behind its decision to opt out of the 700 MHz auction.

Reasons to buy

How has the Brazilian 4G market and infrastructure developed since licenses were first granted in 2012?

Why did the September 2014 700 MHz spectrum auction fall short of expectations?

In which sectors do the leading Brazilian telcos hold the strongest competitive position?

How might a trend towards consolidation in the industry have influenced Oi's decision to not take part in the 700 MHz spectrum auction?

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Table of Contents

OVERVIEW

Catalyst

Summary

THE BRAZILIAN 4G MARKET: A SHORT HISTORY

4G in Brazil enabled through 2.5GHz auction in July 2012

Soccer events kicked off ...

OVERVIEW

Catalyst

Summary

THE BRAZILIAN 4G MARKET: A SHORT HISTORY

4G in Brazil enabled through 2.5GHz auction in July 2012

Soccer events kicked off urban 4G rollout in Brazil

Brazilian 700 MHz 4G spectrum auction disappoints

WHY DID THE 700 MHZ AUCTION FALL FLAT?

3G remains the most important technology in Brazil

The 700 MHz auction brought extra high up-front costs

High costs compounded by unfavourable macroeconomics and industry movements

WHY DID OI OPT OUT OF THE 700 MHZ AUCTION?

Focus on multiple-play services to converge and retain customers

Oi's merger with Portugal Telecom worsens financial position

Potential consolidation could have negated Oi's need to bid

CONCLUSIONS

External and internal factors contributed to a disappointing spectrum auction

A number of factors influenced Oi's decision to opt out of the 700 MHz auction

APPENDIX

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