Dan Swinhoe (South America)- Brazil: Still Holding Back On Giving their Mums iPads

• 1

• Posted by Dan Swinhoe

• Company IDG Connect

• on June 27 2012

During these tough financial times, many businesses are looking to the BRICS as their saviors. Brazil, Russia, India, China and South Africa all have robust growth (especially compared to the U.S. and Europe) and this is especially true in the IT sectors. Focusing on Brazil, is its mobility market as sunny as its beaches?

Forbes called e-commerce Brazil's most promising sector. And it's not hard to see why. Internet users reached 80 million by the end of last year, the fifth highest in the world and achieving a 42% penetration. Though this is a good base, current broadband connection is very low and many areas, especially rural ones, are lacking proper coverage. This is an issue which the government and providers are addressing with new fiber-optics and undersea cables.

Buoyed by the news that 3G subscriptions grew by 99% last year, the government recently looked ahead to 4G, raising 2.93 billion reals ($1.4 billion) in an auction of wireless airways to mobile operators. The winning bids have to have infrastructure in place by April for the host cities of next year's Confederations Cup, and the end of next year for the cities involved with the 2014 World Cup.

Also a good base for e-commerce is the sheer number of mobile phone owners. Penetration stands at well over 100% (around 253 million subscriptions), and looks set to reach around 145% by the end of the year. However, distribution isn't even, with people owning multiple phones a common occurrence. Just like across the world, it's the young who lead ownership and use.

Priced out...

It's not all positive though. Telecoms companies run municipal monopolies, as shown by the fact of the entire area covered by mobile internet, only 12.6% of municipalities have two or more competing market operators. Price is also an issue, as currently it has one of the highest phone rates in the world. And although they are set to fall, this won't be until 2014 or even later. These high costs are why nearly 80% of mobile owners opt to use a pre-paid plan.

Some interesting research by Opera showed 62% of the respondents said they would be willing to spend up to R$10 on a monthly basis for mobile broadband, 55% would like to use their mobile devices for shopping. If mobile operators take this on board and don't price themselves out reach, the introduction of 4G could be the moment that mobile internet takes off.

...But still engaging on a big scale

Brazil is also massive on social media. With 50 million users, it has the second highest number of users in the world, after the US. A critical difference however is Brazil is only at 25% penetration, meaning there's still a huge market out there to sign up, and with three million have joined in the last month alone it looks like those numbers are set to increase. Brazil also wins silver for number of Twitter subscribers, overtaking Japan at the start of the year with a massive 33.3 million accounts, though the land of the rising sun remains more active on the microblogging site. Brazilians are also far better at engaging with content through the likes of comments than most other countries, and are more likely to follow user-generated content.

In countries like the UK and US, the challenge for social media is trying to monetize the huge amounts of mobile users, but in Brazil, they needn't bother. Internet access from mobiles stands at around 3%, desktop being the most popular way of accessing the internet by a country mile.

Who wants a smartphone?

Tablet usage is equal to smartphones, but both remain incredibly low. There are conflicting reports on whether Android or Apple is winning the mobile war, but the iPad has conquered the tablet market. Opera continues its worldwide trend of being the most popular mobile browser . By 2015, half the population is expected to own a smartphone. Meanwhile, there were around 200,000 tablet devices in Brazil by the end of last year, but this is expected to surge in the coming years. Latin Business expects Brazil's tablet sales to reach $1.7 billion next year.

While these predictions may seem a big ask considering the current low levels of ownership, demand is definitely there. According to a survey taken in May, 40% of Brazilian mothers would like a tablet as a present for Mother's Day. Quite how many mums were treated to one is a different story.

Like most of the BRIC countries, Brazil has huge numbers of mobile users, and efforts to bring the mobile internet up to the same levels are underway. The elephant in the room is the massively low number of smart devices in the country. With companies looking to increase e-commerce and contactless payment, and so many people using services like Facebook and engaging with content, not to mention all those mothers waiting to be bought shiny new tablets, it sounds like the perfect setting for a mobility revolution.

By Dan Swinhoe, Editorial Assistant, IDG Connect