Prepaid Cell Phones are Losing Ground to Contract Plans in Brazil

RIO DE JANEIRO, BRAZIL – In telecom language, prepaid has always been synonymous with the majority. It still is, but this leadership is under threat.

From January to May, 4.5 million prepaid cell phones were deactivated, while on the other hand 3.9 million contracts were activated, according to the National Telecommunications Agency  (ANATEL).

Companies say this change is happening due to a combination of factors. Reason number one is directly linked to changing lifestyles and economic times.

“People need to have data, they need to have a certain consistency in the quality of that data, and they need to be connected 24 hours a day, seven days a week. So, data use increases a lot, and these contract plans offer more complete plans for this kind of client”, explains Gabriela Derenne, Claro’s regional director.

“I work with sales. Only the contract internet can help me make deliveries on the street, to get the addresses right, I could not do it otherwise. That’s why I bought this,” says deliverer Marcos Valença.

Simultaneously, it offers innovative equipment, better connection, exchanging all kinds of information. The so-called “internet of things” also helped.

“For instance, the payment machines, each of these machines has a chip inside, and each chip has an associated contract signature,” said Roberto Guenzburger, Oi’s marketing director.

In addition, today’s companies offer cheaper and more advantageous plans, which has adversely affected the former practice of having several prepaid chips on the same phone.

Ten years ago, prepaid cell phones accounted for 80 percent of the market. In 2019, their share fell to less than 55 percent.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.