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Brazil Set for More Than 42.6 Million Connections in 2017

Cisco Broadband Barometer reveals ‘Broadband 2.0' connections grew 13.45% in the second half of 2012, while so-called Broadband 1.0 connections, with speeds between 128 Kbps and 2 Mbps, shrank, reflecting user migrations to high speed Internet use

Sao Paulo, Brazil, May 14, 2013 – Cisco Brazil today presented the latest edition of the Cisco Broadband Barometer 2.0, which analyzed fixed and mobile connections in Brazil through December 2012 and provides an Internet forecast for the next five years. Last year, Brazil recorded 25.8 million broadband connections, up 18.6% from 2011. For 2017, Brazil is expected to have over 42.6 million connections.

The study, which was conducted for Cisco by IDC Latin America, saw fixed-line connections rise 9.1% in the last six months of last year, while mobile connections increased 10.6% in the same period. Increasing demand for online content and applications has made in fixed and mobile connections growing in the second half of 2012.

Brazil has 35 mobile connections for every 100 fixed-line connections. For the Barometer, "mobile access" includes connections to PCs via modems, but not cell phone and smartphone browsing.

Fixed-line broadband connections serve 9.7% of the population and are present in 32.5% of Brazilian homes. What is now referred to as Broadband 2.0 (offering speeds of 2 megabits per second or more) surpassed 10.98 million connections, with penetration of 5.6% per 100 inhabitants. There were over 6.7 million mobile subscriptions, representing 3.4% of the population.

During the second half of 2012, consumers started to migrate toward higher-speed broadband subscriptions. Broadband 2.0 grew 13.45% in the last six months of the year, while so-called Broadband 1.0, with speeds between 128 kilobits per second and 2 Mbps, shrank 2.2%. At the end of last year, 57.6% of fixed line connections were Broadband 2.0, of which 42.2% offered speeds of 10 Mbps or more.

Increasing demand for communications from more "demanding" applications, such as high definition video, the growth of cloud -based applications, alongside a rise in providers' broadband offerings, mainly in the country's major cities, have seen a drop in 1.0 connections as people migrate to broadband 2.0, which means average speeds in Brazil have risen.  Average speeds rose by 346 Kbps in the last half of 2012 and 606 Kbps throughout the year, reaching 4,68 Mbps in December 2012.

The study forecasts that Broadband 2.0 will represent 73.5% of fixed-line connections by 2017, with mobile access representing 31% of all connections. The continuous higher bandwidth offer will contribute positively to this factor.

"With each passing edition, Barometer 2.0 is proof of the rising demand for high-speed broadband in Brazil and confirms the importance of telecommunications infrastructure investments to promote real productivity gains, greater planning via digital inclusion, with consequent effects on life quality and meet the changing needs of consumers", said Anderson André, director of Service Provider, Cisco Brazil.

Other survey highlights

- xDSL connections continue to dominate the market, representing 63.74% of fixed-line connections, growing 12.8% between July and December 2012.

- Cable connections are ranked second among consumers, representing 31.1% of fixed-line connections.

- xDSL and cable connections, which represent 95% of all connections, are likely to continue dominating the market in the coming years, although there is significant growth among other, more advanced technologies like fiber.

- Looking at mobile connections, 3G subscriptions increased 18.7% in 2012 to more than 6.7 million in December. 

 - In terms of pricing, following the trend from the first half of 2012, Brazilian operators concentrated offerings on intermediate speeds (2 Mbps) and higher (5 Mbps or more), with an average monthly access price of 63 BRL.

 - 4G deployment in Brazil, beginning in the cities hosting the Confederations Cup (Belo Horizonte, Brasília, Fortaleza, Salvador Recife and Rio de Janeiro), should have an impact on mobile broadband and data package growth given the higher quality of service offerings.

 - The study also showed that recent industry regulations should attract new competitors, boosting the triple-play (Internet, phone, and TV) market in Brazil and helping to increase broadband penetration.  

 - Another factor driving the broadband advance in Brazil is the changing profile of Internet usage, driven by a desire for better browsing, expanding Internet business to consumer (B2C) and the increasing popularity of social media and content.

About Cisco Broadband Barometer 2.0

Cisco Broadband Barometer 2.0 is a study looking into the importance of broadband for development in Latin America and discusses the need for suitable infrastructure. The Barometer 2.0 survey includes Brazil, Argentina, Chile and Colombia. Cisco commissioned independent consultant IDC to conduct the survey and all related initiatives to distribute this information. This will provide the public opinion with a reliable and segmented source of information on broadband progress, allowing it to compare results with other Latin American countries.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to http://thenetwork.cisco.com.

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