The document provides an overview of the Brazilian IT and telecom market. It discusses factors that make Brazil a good market such as its large economy and population. It then reviews market structures and key figures for mobile, fixed line, internet, and TV services. Overall mobile penetration is high at 83% while fixed line and broadband penetration is lower. The market is consolidating with wireless convergence shifting structures. Opportunities exist in network upgrades, cost reduction, and increasing broadband and digital services.

1. Brazil IT & Telecom Market Overview
Futurecom 2009
Daniel Ramos
October 2009

2. Brazilian IT & Telecom Market Overview
Agenda
1 What makes Brazil a good market?
2 Brazil & Canada Trade
3 Brazil IT & Telecom Market Structure
4 Brazil IT & Telecom Figures (Mobile, Fixed, Internet, TV)
5 Conclusions & Business Opportunities
Brazilian IT & Telecom Market Overview - Futurecom 2009 2

3. What makes Brazil a good market?
Economy (2008 facts):
• Largest national economy in Latin America and the world's 9th largest economy,
estimated at $1.8 trillion;
• Economy is driven by the internal consumer spending (85% of GDP);
• GPD growth in 2008: 5.1 %, 2009 (e): 0.8-1.9%, 2010 (e): 4.5-5.5%;
• Brazil’s currency is up 29% against the US dollar this year;
• Sept 22nd, Moody’s raised the investment rating one level to Baa3. Brazil interest
rate 8.75%;
• Brazil represents more than 80% of Mercosur's economy.
Brazilian IT & Telecom Market Overview - Futurecom 2009 3

4. What makes Brazil a good market?
Population (2009):
• 191 million: 80% urban and 60% high and middle class.
Commercial Infrastructure (2008)
• 67.5 million Internet subscribers (35% penetration);
• 158 million mobile subscribers (83% penetration)
• 10 million Broadband Access subscribers (5% penetration)
• 84 million PC’s in use (14% penetration)
Investment:
• Government’s Growth Acceleration Plan (PAC) to rise to 1.5% by 2010 from the
current 0.5% of GDP;
• 2014 World Cup and the 2016 Summer Olympics Games
• Government objective to have 100% telephony coverage in rural areas by 2014
• Proposal to revive state-run Telebras to manage fiber optic network
Brazilian IT & Telecom Market Overview - Futurecom 2009 4

5. Brazil vs. Canada GDP Growth Rate
(%)
Brazilian IT & Telecom Market Overview - Futurecom 2009 5 Source: IBGE (Instituto Brasileiro de Geografia e Estatística, 2009
Bank of Canada, July 2009

6. Brazil vs. Canada GDP Growth Rate
(%)
Brazilian IT & Telecom Market Overview - Futurecom 2009 6 Source: IBGE (Instituto Brasileiro de Geografia e Estatística, 2009
Bank of Canada, July 2009

7. Brazil vs. Canada Population
(Millions of people)
58% 67%
Brazil High / Middle Class
Brazilian IT & Telecom Market Overview - Futurecom 2009 7 Source: IBGE (Instituto Brasileiro de Geografia e Estatística, 2009
Fundaçao Getulio Vargas, 2008
Stats Canada, July 2009

8. Brazil vs. Canada Population
(Millions of people)
Brazilian IT & Telecom Market Overview - Futurecom 2009 8 Source: IBGE (Instituto Brasileiro de Geografia e Estatística, 2009
Fundaçao Getulio Vargas, 2008
Stats Canada, July 2009

9. Brazil Exports & Imports Growth Rates
(%)
Brazilian IT & Telecom Market Overview - Futurecom 2009 9 Source: The World Trade Organization (2008)

10. Brazil Canada Trade
(millions)
Brazilian IT & Telecom Market Overview - Futurecom 2009 10 Source: Statistics Canada, 2008

11. Brazil ICT & Telecom Market
Structure
Merge /Acquisition Completed Merge /Acquisition Planned
Brazilian IT & Telecom Market Overview - Futurecom 2009 11 Source: eXpancom, 2009

12. Brazil Mobile Telephony Market Share
2009 (%)
Mobile VoiP
Mobile TV
Mobile Fixed Telephony
Brazilian IT & Telecom Market Overview - Futurecom 2009 12 Source: eXpancom Latin America 2009

13. Brazil Mobile Number of subscribers
(millions)
Portability 5%
6%
9%
80%
80%
80%
80%
80%
80%
80%
79%
21% 20% 20% 20% 19% 19% 19% 19%
Post-paid
Brazilian IT & Telecom Market Overview - Futurecom 2009 13 Source: Pyramid Research (2008)
eXpancom Latin America

14. Brazil Mobile Average Revenue per
Subscription
(USD$)
Brazilian IT & Telecom Market Overview - Futurecom 2009 14 Source: Pyramid Research (2008)
eXpancom Latin America

15. Brazil Broadband Market Share
2009 (%)
Mobile Broadband
Brazilian IT & Telecom Market Overview - Futurecom 2009 15 Source: eXpancom Latin America 2009

16. Brazil Internet Broadband Market
(millions)
36%
25% 62%
24%
29%
19%
34%
19%
Cable DSL Mobile Broadband
Brazilian IT & Telecom Market Overview - Futurecom 2009 16 Source: Cisco Broadband Barometer, Oct 2009,

17. Brazil Fixed Telephony Market Share
2009 (%)
Mobile Fixed Telephony
Brazilian IT & Telecom Market Overview - Futurecom 2009 17 Source: eXpancom Latin America 2009

18. Brazil Fixed Telephony Lines in
Service
(millions)
Portability
Brazilian IT & Telecom Market Overview - Futurecom 2009 18 Source: ANATEL (2009)
eXpancom Latin America

19. Brazil Public TV Market Share
2009 (%)
Brazilian IT & Telecom Market Overview - Futurecom 2009 19 Source: eXpancom Latin America 2009

20. Brazil Paid TV Market Share
2009 (%)
IPTV
Brazilian IT & Telecom Market Overview - Futurecom 2009 20 Source: Meio e Menssagem – Anuário das mídias 2008

21. Brazil Paid TV Subscribers
(millions)
Digital TV
(ISDB-T)
33%
60%
DSL Cable
Brazilian IT & Telecom Market Overview - Futurecom 2009 21 Source: ANATEL (2009)
eXpancom Latin America

22. Brazil IT & Telecom Market Share
Who will win the battle?
Operators with
the largest
customer base
IPTV
Mobile VoiP
Mobile Internet
Mobile TV
Mobile Fixed Telephony
Source: eXpancom Latin America 2009
Brazilian IT & Telecom Market Overview - Futurecom 2009 22

23. Brazil IT & Telecom Trends
Conclusions & Opportunities
• Industry consolidation,merging and acquisitions;
• Wireless convergence will shift the current market structure
• Fixed operators will continue to loss traffic and revenue to mobile and VoIP operators
• Wireless and Satellite networks upgrades and expansions to support new services and
coverage: WiFi, Mobile TV, Internet, and rural telephony;
• Demanded cost reduction and introduction of triple play packages and 3rd party VAS to
ensure margins and retain customer base
• Migration towards an IP secure network and applications (i.e. IPTV, VoIP) and services
(E-Commerce, E-Banking, E-Gov)
• Increase of broadband and laptop penetration (urban and rural areas)
• Digital TV conversion completed by 2014
Brazilian IT & Telecom Market Overview - Futurecom 2009 23 23

24. Obrigado!
Market Resear ch
Busi ness Dev el op ment
Tr ad e
eXpancom (Canada) eXpancom (Brazil)
402 Notre Dame St, Suite 300 Rua Nasciemento Silva No.97-102
Montreal, Quebec Ipanema, Rio de Janeiro
1.888.421.2456 +55.8636.1153
info@expancom.com info@expancom.com
Brazilian IT & Telecom Market Overview - Futurecom 2009 24