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雷达卡
􀀗 We believe Brazilian mobile is more
mature than headline figures suggest
􀀗 We favor operators’ prioritizing profits
over plain subscriber growth
􀀗 Reiterate OW (V) rating on Vivo;
downgrade TIM to UW (V) from N (V)
In March, Brazilian telecoms regulator Anatel reported 154m
mobile subscribers, implying 80% penetration. Mobile
operators in Brazil reported c30m net adds in 2008, driving
subs growth of 25% y-o-y and increasing penetration 15ppts in
a single year. These statistics give the impression of a booming
market still in the “acceleration phase” of the S-curve.
However, we believe that these figures are misleading, as
subscriber growth is inflated by a growing trend of users’
taking out multiple mobile subscriptions. This overstates
growth and penetration gains, making it hard to gauge market
maturity. Separating remaining individual user growth from the
headline numbers is critical to determine future sector revenue
growth, as new users bring new spend, whereas existing users
who take additional accounts merely substitute existing spend.
We estimate the addressable market for mobile in Brazil at
just over 100m people. We estimate 1.75 accounts per user
on average today, and so c150m subscriptions suggest c85m
individual users, or c85% penetration of the addressable
market. This leaves just c15m people who are not mobile
users currently, but who might be in the future. With only
modest levels of new user growth remaining, sector revenues
become more dependent on increasing the spend of existing
users. We believe this requires less-aggressive voice pricing
and incremental revenues from 3G data. We believe Brazilian
mobile operators therefore need to move beyond the “land
grab” mentality, characterized by aggressive pricing and
subsidies, to focus more on growing user spend and profits.
We raise our target price on Overweight (V)-rated Vivo Part.
PN shares (VIVO4.SA, BRL37.35) to BRL51 from BRL46.
We downgrade TIM Part. PN shares (TCSL4.SA, BRL3.60) to
Underweight (V) from Neutral (V), and cut our TP to BRL3.30
from BRL4.30. We maintain our Overweight (V) rating on
America Movil ADRs (AMX.N, USD35.89) and our USD42
TP, despite our concerns about its aggressive strategy in Brazil.
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