Small-scale Internet Providers Outperform Vivo, NET, and Oi in 3,500 Cities

RIO DE JANEIRO, BRAZIL – The regional broadband providers are pushing traditional companies like Vivo, Oi, and Claro/NET: a Teleco survey points out that smaller-scale operators are leading the market share in 3,509 Brazilian cities.

This is the number of cities in which each operator has leadership in terms of market share:

Competitive (small-scale): 3,509 cities
Oi: 1,631 cities
Vivo: 323 cities
Claro/NET: 97 cities

Data relate to September 2019. At the end of the previous year, small-scale operators were already leading in 3,140 cities, while in 2017 there were 2,523 municipalities where a small-scale company was the main provider.

This type of growth occurs because large-scale operators are unable to invest in the expansion of fiber optics networks. Oi is the most affected since the company has a concession in all Brazilian states except São Paulo. It has extensive coverage of broadband service but is limited to ADSL/VDSL technology.

The vast majority of small incoming providers operate with fiber optics and, without a combination with landline, mobile, and pay-TV, they can deliver higher Internet speed at more attractive prices.

Oi, Vivo, and Claro try to contain growth of smaller-scale companies

Oi has already put into practice its strategic plan that provides fiber optics coverage for 16 million households by 2021. ANATEL’s September data shows that, of the operator’s 5.6 million fixed broadband accesses, only 13.7 percent use last mile fiber optics.

In addition to expanding its own network, Vivo is investing in a franchise model, in which entrepreneurs create their own network using the models of the parent operator and adopt the brand Terra connected by Vivo Fibra. The minimum investment for the franchisee is R$ 2.5 million in a 10-year contract. The model has already been adopted in the city of Águas Lindas de Goiás (GO).

Meanwhile, Claro decided for fiber optics in new cities. The company, through NET, mainly uses DOCSIS technology, which uses coaxial cables; this represents 96.7 percent of accesses.

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