The phone also watch TV in Brazil - The Economist

December 25, 2013 – 15:49

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Economic Value / Brazil

datacenter Tamboré Telefonica. Photo: Courtesy Telefónica

offer subscription television became an attractive business for telephone concessionaires. The groups that lead the industry in Brazil, Telefónica (Live), Oi and America Movil (Embratel, Claro, Net) began trying pay television as a central strategic in their business models.

parameter to perceive the importance of this market is the potential it offers. There is a universe 28.5 million Brazilian families who can pay television contract, the executive director of Claro TV, Antonio Joao Filho.

service is present in 17.4 million homes and the company estimates that of the 58 million homes in Brazil, 46 million have sufficient income to support a subscription television service. As the country has about 22 million homes with satellite dishes, at least part of that audience could also join the service, according to family income.

A key point is that the telecommunications service concessionaires are looking ways to increase revenue, profit because television is in decline, but remains high.

Among operators with shares listed on the BM & F Bovespa, the main index of the Sao Paulo Stock Exchange, the profit for the third quarter fell 35.8% compared with the same period of 2012, according to information from the agency Economática statistics. The total net profit between public companies was 1,240 million reais ($ 540 million), or 693 million lower than the result for the same interval last year’s actual. In the ranking by sector, telecommunications appears as the third in which the profit recorded a sharp decline. The first was the oil and gas (47.4% reduction) and the second on food and beverages (-36.1%).

GENERATION RELEASE

director of Accenture, Marcelo Fortes, there is clearly a mismatch between revenues and costs in telecommunications companies, which makes these groups accelerate the strategy of expanding the range of services in its business model . The search is for ways to maximize return on network investment and generate more revenue whereas the traditional package with the trio of services landline, mobile and broadband became insufficient to ensure the best results.

In that scenario, the focus is no longer on the geographical named user who first had a landline at home, then a mobile broadband service and the trio generated good income for operators of telecommunications services, according Fortes. The profile is now becoming more customer model family with a service that treats parents and children, with options for different age groups.

Fortes says consumers need to understand and plan how to trace specific offers for each customer. Not coincidentally called combos, offering services to conquer family of customers, is the strategy pursued by the providers of telecommunications services.

increased competition in each of these services is a factor in this process, given that all operators offer the total package, including pay television. To conquer the customer the way to ensure a differential in the quality of service, care and the relationship with the user because the technology and the price are very similar, said Joao Filho.

Net

America Movil, the most consolidated in that market, is to bring to the board’s plan to invest 5000 million in 2014 and 5.500 million in 2015. The company linked to Mexican tycoon Carlos Slim Helú plans to close this year with its cable infrastructure covering 16.9 million residences. With the increased investment, the forecast is that by the end of 2015 the network covers 25.7 million homes.

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