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Commercial Efforts ExpandingBrazil also has the largest telecommunications sector in Latin America. In 2005, the sector generated revenues of about $35.6 billion, a 23 percent increase over 2004. Services, including carriers, accounted for $27.8 billion of net revenue, while hardware and software suppliers contributed $6.8 billion. The broadcasting market represents about 10 percent of the total telecommunications market, and Telemar, Telefónica and Brasil Telecom so far have benefited from inflation-based price adjustments and deployment of new product lines to create revenue growth. But 2006 was a turning point for the industry, as previously marginal growth in some sectors turned negative, long-distance revenues fell sharply and incumbents began to feel the effects of mobile substitution. According to the Brazilian Ministry of Telecommunications, 2007 is expected to bring little relief, as the mobile base will continue its brisk growth and a new tariff-adjustment mechanism will keep price changes below the inflation rate. Convergence is dramatically changing the broadcasting industry, making it difficult to distinguish precise boundaries between broadcasting and non-broadcasting related business sectors.
Telecoms specialist Rafael Fanchini, Pricewaterhousecoopers’ Brazil manager, thinks that the most important step going forward is that “Brazil’s government is currently acting to modernize its geo-satellite network.” The Brazilian government has opened a new tender, inviting the country’s private sector to exploit three of Brazil’s nine geostationary orbital positions. In November 2005, the Brazilian National Telecommunications Agency issued a note expressing its intention to grant licenses for the operation of what it called a new Brazilian Satellite Network. “Within the tender’s own definitions, the companies will have up to four years to launch their satellites and occupy the desired orbit, with 100 percent coverage of Brazilian national territory,” Fanchini says. “Brazil is counting on these three new satellites to provide new telecom services for TV, telephone, data communication, multimedia and Internet.”
Commercial companies around the globe also are expanding their activities in Brazil. Early in 2006, ViaSat extended the COC Education Network, which provides interactive educational services to about 250,000 students in more than 120 locations throughout the country. By mid-2006, ViaSat also was in full-scale deployment of 4,400 sites with partner Comsat-Brasil for GESAC, an e-government project driven by the Ministry of Communications. On the corporate front, ViaSat has rolled out more than 1,300 sites with Telespazio-Brasil for applications such as corporate virtual private networks, Internet access and Voice over Internet Protocol (VoIP) telephony.
“The Brazilian market has been especially buoyant, driven in large part by the institutional sector,” says Robert Feierbach, ViaSat’s managing director for Latin America and EMEA. “Funding for these projects is provided by the Brazilian administration for large-scale, country-wide projects, with the aim of improving access to technology and information within the government agencies, rendering them more efficient.” ViaSat sees the prospect for additional medium- and large-scale satellite projects materializing in Brazil throughout the next few years. “Those prospects are predicated on the present administration’s continuing desire to improve access to information and real-time communication among its various institutional entities, spread-out across the vast territory of South America’s largest country,” he says.
Russell Ribeiro, general manager of Gilat do Brasil Ltd., believes Brazil’s public institutions have a great deal of confidence in VSAT technology. In July, Comsat selected Gilat Skyedge satellite hub stations and nearly 5,000 VSATs to provide broadband connectivity services for Caixa Econômica Federal in Brazil. Caixa is one of Brazil’s largest public banks and is the institution responsible for managing the country’s federal lottery. The network is linking Caixa’s sites for both lottery transactions and general banking, including bill-paying services. When deployment is completed, this will be one of Brazil’s largest VSAT networks.
Brazilian retailers are certainly getting interested. Ribeiro says that “like many of their counterparts worldwide, these retailers have come to trust VSAT networks for a wide range of business-critical applications.” In January 2006, Gilat partnered with Embratel and Starone, the largest provider of satellite capacity in Brazil, to deploy a 2,400-site VSAT network for O Boticário, Brazil’s largest cosmetics chain. The remote sites are being deployed throughout O Boticário stores in airports, supermarkets and shopping centers. The VSAT system supports credit card authorization, Internet access, VoIP, video, audio and IP multicast used for distance learning, and music clips distribution.
Intelsat has been one of Brazil’s largest providers of Fixed Satellite Services, and customers include: the country’s largest broadcaster, TV Globo; major corporate service providers such as Hughes do Brasil, Telespazio Brazil, Primesys, Comsat and Impsat; and major telecommunications carriers Embratel and Intelig Telecom. “Intelsat’s dedicated video solutions include broadcast and cable head-end distribution, niche programming and full-time contribution,” says Carmen Gonzalez-Sanfeliu, Intelsat’s vice president, Latin America operations. “… Intelsat is ideally positioned to support the next phase of Brazilian telecom expansion,” she says. “The broad coverage offered by Intelsat’s IA-8 satellite is ideal to help mobile telecom operators build out their networks into new areas using cellular backhaul. It can also help those operators bring voice, broadband data and Internet to businesses and consumers in the region’s most remote locations.”
In September, Intelsat expanded its offering to Brazilian operators and corporations with the introduction of its Globalconnex Managed Solutions. “These solutions bundle space segment with teleports, points of presence and ground network infrastructure and are intended to complement the infrastructure of the operators on our system,” says Gonzalez-Sanfeliu. “They provide end-to-end support for media, trunking, broadband Internet, VoIP, Wi-Fi hotspots, distance learning, and point-of-sale transactions. Other components of this offering include connection to Tier 1 backbone, satellite hub station, VSAT terminals, and 24/7 network service support.” Intelsat thinks that in the near future, its’ satellites can serve as a platform for multimedia content distribution “to support the evolution of video applications that include HDTV, IPTV, store-and-forward platforms and private video networks,” she says.
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