News Release

Broadband in Brazil Exceeds 8.1 Million Connections

Cisco Press Release

Cisco Broadband Barometer Highlights 1.74 Million New Broadband Connections in 2007

SÃO PAULO, Brazil, March 5, 2008 - The total number of broadband connections has grown 30.5 percent since 2006, reaching 8.1 million broadband connections according to the latest results of the Cisco Broadband Barometer, a study sponsored by Cisco and conducted by IDC. Despite this accelerated growth, overall broadband penetration is just under 4 per cent by population and 71.9 per cent of connections are at speeds of under 1 Mbps, which highlights that further work is needed to reach penetration levels in other countries.

"Year-over-year growth has been representative," said Pedro Ripper, president of Cisco do Brasil. "Brazil has doubled its number of connections since 2005, leaping from 4 million to 8.1 million in 2007. With the introduction of mobile broadband, there is a good chance of surpassing the initial Cisco target of 10 million connections set for 2010. The expectation is that by then, Brazil will have 12 million fixed connections and 3 million mobile connections, totaling 15 million."

1.74 million new fixed connections were registered during 2007, reaching a total of 7.493 million at the end of 2007. Another notable finding from the study is the growth in mobile broadband which grew 124 percent from the previous quarter (July to September 2007), with 602,000 new connections registered.

"With the great success of the third-generation, or 3G, spectrum auction in Brazil, large investments are expected in cellular network infrastructure, as well as an increase in coverage and mobile broadband services in Brazil. With the effective arrival of 3G services in the market, allowing access speeds of over 2 Mbps, this segment will attract more and more customers, mainly in the corporate market," Ripper said.

The fastest growing broadband-speed sector was for 1 Mbps, with a 28.1 percent market share and growth of 2,368 percent in new connections in the last two years. The 512 Kbps to 1 Mbps sector accounts for 31.2 percent of the market. The sector over 8 Mbps currently accounts for 0.5 percent of the market.

"The fastest-growing segments are at the higher speeds, revealing increasing demand driven by the arrival of Web 2.0 and collaborative tools. This increases the need for bandwidth, as users get access to more applications, such as video and music online," Ripper said.

The number of new broadband users in the band up to 256 Kbps has grown by 84 percent since 2006, mainly as a result of the government's program to provide tax breaks on purchases of inexpensive computers.

Sponsored by Cisco and carried out by IDC Brasil (www.idc.com), the Cisco Broadband Barometer is published quarterly to measure the evolution fo the Brazilian broadband market. As part of this vision - to promote the growth of broadband services in Brazil - Cisco has proposed a target of 10 million high-speed connections by 2010 to help stimulate the economic development of Brazil, boosting its competitiveness and productivity.

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Notes for Editors

Key Findings as of December 2007

By Region

The distribution of broadband access by geographic region has not changed significantly. São Paulo state remains the region with the highest use of the technology, with approximately 40.2 percent of the market and a penetration of 7.1 percent.

São Paulo is also the fastest-growing market in absolute numbers of subscribers, through its share of PC and laptop sales. The state expanded by approximately 33.5 percent in subscriber terms in 2007.

In Brazil, overall, broadband penetration is 4 percent, representing approximately 13 percent of the country's homes.

By Consumer Type

Residential access remains the leading stimulus in the broadband market, responsible for 87 percent of the connections, up 31.1 percent in 2007. The corporate segment has grown at slightly slower rates, representing 13 percent of all broadband subscribers, up 26.5 percent from the year before. This decrease is attributed to the near saturation of this segment , and service providers are now seeking to migrate corporate users to dedicated Internet connections with better levels of service for critical business applications.