By 2011, according to a new report from Pyramid Research, Mobile broadband will surpass fixed broadband in Brazil as the preferred way to access the Internet, reaching nearly 27 million data card users in 2014 from 1.5 million in 2008.
The study "Brazil's Brave New Mobile Broadband World: The Rise of Data Cards" examines the potential of mobile broadband computing devices to reach significant adoption levels in Brazil and mobile broadband's prospect of surpassing fixed broadband in the near future.
The 12-page report provides Pyramid Research's five-year forecast on data cards adoption in Brazil and discusses the strategies of the main mobile players, including two case studies: Claro and Oi.
The work also discusses the latent demand for broadband in the country and points to it as one of the key drivers for the positive mobile broadband estimates.Â
Data cards are set to become an important driver of broadband adoption. Operators should be prepared for strong, sustained growth going forward as mobile broadband becomes a true alternative to fixed broadband in Brazil, notes Fernando Faria, analyst at Pyramid Research and author of the report.
"According to Anatel, the number of mobile data devices in May 2009 was nearly 4.3 million, which represents roughly 30 percent of the total broadband market, already a clear indicator that there is significant pent-up demand still in the marketplace," he says.Â
"Pyramid expects mobile broadband to surpass fixed broadband in Brazil by 2011 and to reach nearly 27 million data card users in 2014, from 1.5 million in 2008, a 62 percent Compound Annual Growth Rate (CAGR)," he adds.
Data cards offer an easy way to connect in a variety of locations with competitive speeds, concludes the report. "Besides this, there are a few other aspects people are starting to pay attention to in Brazil, such as shorter installation time. fewer hurdles with LAN compatibility and absence of wires and cabling, to name a few," says Faria.
Although mobile broadband is considered to be more expensive than fixed broadband, as data cards reach significantly higher adoption levels, it becomes financially viable for mobile operators to drop prices.
"Despite this immense potential, Pyramid is observing an early issue with an unexpectedly high churn rate in mobile broadband service, which we credit to the 'frustration effect,' " explains Faria. "Provided operators keep improving network quality to address a few early coverage issues, data cards could become the dominant broadband access device in Brazil," he says.