"Mobile rates in Brazil are the world’s highest — but that doesn’t mean mobile carriers post amazing profits down here. Rather, Brazil is one of the countries with the lowest margin in mobile services — a sign of fierce competition. A study by Valor based on data from 2009 to 2012 shows the average margin in Brazil was 27%, only slightly above margins posted by US mobile carriers (25%) and the phone business as a whole in the United Kingdom (24%)".
"The landline margin in Brazil is higher: during the period studied, it stayed at 36% for the less competitive half of the sample".
"According to companies and industry observers, to understand the Brazilian situation one has to account for higher taxes, interconnection fees, a large base of pre-paid customers who use little data and bring in low sales per user, as well as fierce competition and a negative outlook for carriers that didn’t invest in infrastructure to offer pay-TV as part of a bundle. One shouldn’t forget that 79% of mobile connections in Brazil come from pre-paid plans a system that reduces the average client bill. Soummo Mukherjee, senior vice-president at Moody's, says that the number of pre-paid customers usually is high in developing countries — he says the market dynamics in South Africa are very similar to Brazil’s. The difference, Mr. Mukherjee says, is that South Africa does not have four strong competitors like Brazil".
Source: Valor International
