4 Market realities that every small and medium provider needs to know

There are currently 4 essential realities in the Internet Service Provider (ISP) market. It is important to observe both the internal points – from our own company – and the external ones – the market in which we operate. Internally, we have the help of OZmap, to generate intelligent information from georeferencing. OZmap outlines the entire provider network and reproduces up-to-date data for management optimization and important decisions. As for the external environment, we highlight 4 essential topics in the current market. Check out:

1 - The internet provider market is dominated by small and medium providers

In recent years, small and medium-sized providers have been dictating the pace of expansion of broadband service in Brazil. “Half of the fiber optic connections in the country are in the network of regional providers”, confirms Basílio Perez, President of Abrent. Basílio points out that “Fiber optic technology became much cheaper” which leveraged this growth. In 2018, fixed broadband based on fiber optic technology reached 5.19 million connections.

 The Survey released in 2018 by the Internet Management Committee (CGI.br) shows that in the previous year (2017), 78% of internet providers in the country provided broadband connections, almost 30% more than recorded in 2014. According to the expert Carina Gonçalves, Senior Consultant at Frost & Sullivan, “Some local players have grown large enough to provide connectivity entirely to their own network, especially in underserved locations.” This growth has attracted significant investment funds to “expand and modernize its networks, as well as develop new services beyond connectivity, such as data center and cloud computing”. According to CGI.br, the total number of active internet service providers in the country jumped from 4,204 to 6,618 between 2014 and 2017 – an increase of 57%.

2 - Market for regional fiber optic providers will move US$ 45 billion

Competitive, billionaire and increasingly conducive to companies focused on the local customer: this is how the Brazilian broadband internet market has come to fruition, according to data from several consultancies, regulatory bodies and sectorial entities. According to a study by Frost & Sullivan, total revenue from telecom services in Brazil will exceed US$ 45 billion in 2022, well beyond the US$ 38 billion measured in 2016. Broadband is the main driver of these gains.

The segment of regional providers (ISPs), has growth above the large telecommunication operators. In 2017, around 1.91 million new broadband contracts were signed in the country by regional providers. A study by Anatel that evaluates this market from 2007 to the end of 2018 points out that the number of fixed broadband subscriptions increased by 276% in Brazil, meanwhile large Telecommunications lost ground. Anatel assesses how Small Carriers (PPP) have been expanding at a strong pace: today, most municipalities, 78.2%, have five or more active ISPs. The largest operator present in the country dropped from 42.6% in 2007 to 19.2% in 2018. The second largest reduced from 28.1% to 24.3%.

3 - Study proves that 83% of new accesses came from regional internet providers

The expansion of regional providers was even greater in regions that were previously dominated by large operators: in the Southeast, they were responsible for 83% of total new accesses; in the South, by 73%; Midwest by 69% and North by 55%, according to Anatel data. Localized operation attracts more subscribers, leaving only 17% of the entire space for large operators.

To better understand this expansion, it is enough to analyze the Northeast, where regional operators had a growth of 104%, with 380,516 new accesses, while the large operators lost 17,856 accesses from their base, during the period from January to December 2018.

4 - Optical fiber market continues to rise

“Optical fiber continues to grow and bring connectivity to different parts of Brazil”, comments Basílio Perez, director of ABRINT. It is known that in 2018 it became the favorite method of connecting to the internet at home, 138 new Brazilian cities registered new accesses through the format.

The states with the highest fiber density are: Acre, Ceará, São Paulo, Rio de Janeiro, Paraná and Santa Catarina, in addition to the Federal District. All with 80% to 100% from cities served by fiber technology. Piauí, with 20%, is the state with the lowest density, but which does not escape the exponential growth of optical fiber.

With this data it is possible to get several insights on how to position yourself in the provider market, but are you clear on the current situation of your network? What are the best actions to take? What are the needs of your customers and potential customers in your region and how can you meet them? If you have any doubts when answering any of these questions, we can help you! Send us a message and one of our experts will contact you to advise you. Or try our OZmap system now!

Learn about the benefits of network management