São Paulo, March 30, 2009 - Cisco today announced the 11th edition of the Cisco Broadband Barometer, showing a 45.9 percent growth in broadband internet connections in 2008 in Brazil. The accelerated market growth can be attributed to new offers and combined services from service providers and an ongoing tax reduction program for computers that cost below 4.000,00 reais (US$ 1.790,00) as a digital inclusion measure from Brazilian government.
Mobile broadband also registered strong growth, accounting for 16.8 percent of total broadband connections, demonstrating that this type of access is becoming popular in Brazil.
Fixed broadband accounts for 9.83 million connections, a 12.6 percent increase from to the previous edition of the Barometer (June 2008) and 31.2 percent in the year-over-year comparison.
The penetration of broadband connections per 100 inhabitants reached 5.16 percent in December 2008, compared to 4.6 percent from the previous Barometer edition. The penetration of residential access in Brazilian homes has also moved up to 15.94 percent in December 2008, compared to 13 percent in June of the same year.
The increase in the use of rich media applications in the country also contributed to demand growth in 1 Mbps to 1.99 Mbps connection subscriptions and the 'above 2 Mbps' category - which together account for 33.73 percent of the market. However, lower speeds (128 Kbps to 512 Kbps) showed a decrease in demand. This trend is also presented in the series of Cisco Visual Networking Index studies, which predicts a sixfold increase in Internet traffic between 2007 and 2012, attributable mainly to video social networking.
By December 2008, 3.18 million connections were needed to reach the goal of 15 million connections by 2010 in the country. In the first edition of the Cisco Broadband Barometer was set the goal of 10 million connections for 2010. However, with the launch of mobile broadband, this goal was reviewed in 2008 to 15 million connections in 2010.
"The success of mobile broadband and the demand for new wireless connection offerings illustrate that the market is clearly expanding, even in this challenging environment," said Rodrigo Abreu, Cisco country manager in Brazil. "The rapid growth confirms the strong demand for broadband and demonstrates that the launch of new broadband offers and new types of connection, such as WiMAX, will be well received in the market. Increasing broadband penetration is critical for Brazil to accelerate economic growth, strengthen its competitiveness, and create business opportunities and new jobs in the information economy."
"Additional options of service packages, together with the continuous growth of the installed base of computers due to tax reductions are key factors which accelerated broadband adoption in the country," added Abreu. "Even though the growth was significant last year, we still have a lot of work to do to achieve broadband penetration levels which will further drive social and economic development in the country. We have to continue pushing for ICT investment programs that can effectively utilize technology adoption as one of the key drivers for economic growth across all segments, from citizens to public sector to small and medium businesses."
Other Key Findings:
- In the analysis by market segment, homes are leading with 88.6 percent of the fixed connection total, while businesses account for 11.4 percent. The results of the second quarter of 2008 reveal the expansion of 1.1 percent of the home market compared to the business one.
- The distribution of mobile connections per market segment reveals the dominance of "residential" over "business" - The former accounts for 72.3 percent of connections, while the latter accounts for 27.7 percent.
- As for the distribution per region, the state of São Paulo claims 31.9 percent of all mobile connections, driven by the highest 3G coverage in the country and because has the highest adoption rate of laptops in Brazil.
- The migration of small and medium-sized businesses to dedicated lines was a trend. In June 2008 there were 10,200 dedicated Internet lines in small companies in Brazil, jumping to 12,000 lines in December of the same year. In midsize companies, the jump was from 17,100 to 19,900 in the same period.
- The distribution of fixed connections per download speed grew in both the '1 Mbps to 1.99 Mbps' category and in the 'over 2 Mbps' category. The first one went from 20.20 percent of the total connections in June 2008 to 20.66 percent in December of the same year, while the 'over 2 Mbps' category went from 12.8 percent to 13.07 percent of the connection total.
The Cisco Broadband Barometer
Sponsored by Cisco and conducted by IDC Brasil (www.idc.com), the Cisco Broadband Barometer is published every six months, with the goal of measuring the evolution of the Brazilian broadband market. As part of the vision of promoting the growth of broadband service in Brazil, Cisco proposed the goal of 15 million high-speed connections by 2010 to foster the country's economic development and increase its competitiveness and productivity.
For the 11th edition of the Barometer, Brazil's main Internet service providers (ISPs) were interviewed. The evaluation is the result of a primary survey with specialized analysts, broad experience in the local telecommunications market, and a secondary survey involving official statistics, regulation agencies and specialized media.
The Barometer methodology considers dedicated IP, ADSL, cable modem, fixed wireless and satellite as fixed broadband connections, while mobile includes the access packages sold for PCs and not 3G telephones.