There’s an awful lot of mobiles in Brazil—and more on the way
ON THE MOVE ONE IN THREE BRAZILIANS IS LIKELY TO HAVE A CELLULAR PHONE BY 2007. ONE IN SIX ALREADY HAS ONE AND TEXT MESSAGING HAS TAKEN OFF. TELE NORDESTE CELULAR AIMS TO BE A BENCHMARK OF EXCELLENCE IN THE FIVE STATES IT SERVES

IN TOUCH Mobile phone services are available to Brazilians whenever and wherever they want them

THE HUGE landmass of Brazil and the expense of rolling out fixed lines inevitably mean that mobile phones will dominate future telecommunications.
The Brazilian cellular market has expanded rapidly since deregulation and the entry of major European players, with the development of mobile data technology and digital technology also contributing to the sector’s growth.
By 2007, it is estimated that one in three Brazilians will have a mobile phone, out of a population of more than 170 million. Currently, approximately one in six uses one and for many it is their principal phone.

António Carlos Valente da Silva, Vice President of Anatel, the National Telecommunications Agency of Brazil, says, “Right now we are seeing a veritable revolution in the provision of telecommunications services in Brazil.
“Until not long ago, it was unthinkable for the great majority of the population to have access to fixed or mobile telephone services at affordable prices. Every day, advertisements throughout Brazil offer those services at prices that even many low income citizens can afford.

“Citizens of Brazil today can obtain mobile cellular services whenever they want, wherever they want, in virtually any part of the nation’s territory.”
Tele Nordeste Celular, however, sees low income as one of the limiting factors on the market. The rate of growth in mobile telephony in Brazil’s northeastern region, where the company operates—comprising the states of Piaui, Rio Grande do Norte, Paraiba, Pernambuco and Alagoas—was about 485 percent between 1997 and 2001. Mobile penetration is now above 10 percent of the regional population.

Walmir Urbano Kesseli, Tele Nordeste Celular’s Chief Financial Officer, says, “We operate in a very specific region of Brazil, with 27 million people, but with an unusually high income distribution.”
The company calculates that, in the nation as a whole, less than half the population can afford a cellular phone. Growth has been around two percent a quarter, but the company says it is working in an almost saturated market at present.
“In order to increase our market penetration we have to deal with the issue of income distribution,” says Mr. Kesseli.

“On the other hand,” he adds, “we have a large group of corporate clients, for whom our treatment is completely different. Small companies can see in the services that we provide a good platform in which to invest and develop their businesses and they are accepting the new services we offer. The revenues from the corporate market represent the larger part of our total revenues.”

Most of the population in the region lives along the coast, in cities like Recife. “However, there are several areas of economic activity where our coverage is much higher than any of our competitors,” he adds.
Although the states served by Tele Nordeste Celular have the lowest gross domestic product (GDP) per capita in the country, the region has experienced growth above the national average, spurred by a rise in tourism. Many companies from the southern states, particularly from São Paulo, have moved to the region, persuaded that the environment, the labor force and the prospects of growth are better.

The sole controlling shareholder of Tele Nordeste Celular is Telecom Italia Mobile (TIM), one of a number of European telecommunications companies to have entered the Brazilian market in recent years.
Tele Nordeste Celular’s aim to be a leader and a benchmark of excellence in the telecommunications market has ensured that the company continues to provide new services and to satisfy customers both corporate and individual.

Last year, its digitalized network reached more than three-quarters of voice channels, and the vast bulk of customers now use digital handsets. Through roaming agreements, customers can call not only the rest of Brazil but also Uruguay, Argentina and Paraguay.
Although new technology enables mobile users to access the internet through their handsets, Mr. Kesseli says, “I think that the first need of our people is to communicate. More advanced uses of cellular telephony will come as a natural development.

“Nevertheless,” he adds, “we are experiencing a huge increase in the use of text messages. In the past six months we have had more than a 500 percent growth in text messaging, and we are exploring these possibilities.”
The Rede Inteligente (Smart Network) service, for example, provides its customers with leading edge technology, exclusively geared to the corporate market. This allows companies to create private cellular networks (starting with three post-paid active lines) with a significant reduction in cost, plus several other features such as call blocking and quick dialling.

Reduced rates are also available to prepaid customers, while Timmy Wave is a prepaid service which provides a range of innovations including a mailbox that sends voice messages to groups of up to eight people.
“When cellular companies started in Brazil, Tele Nordeste Celular was in a completely different situation,” adds Mr. Kesseli. “After three years, we have built new systems and have a new kind of employee. We have a new approach to the market and a new customer service. We have learnt very quickly and our productivity is growing incredibly fast.”