World Cup Brazil 2014

Brazilian newspaper Valor (the best business newspaper in Brazil) published an article today July 21st 2010 (for subscribers only) about the investments which will be made in the IT (Information Technology) and Telecom sectors to prepare the country for the World Cup 2014.

According to the article, Brazil will invest a total of R$ 21.3 bn (about  US$ 12 bn, at current exchange rate) in infrastructure, to upgrade internet backbones (fiber optics, routers, computers, etc), fixed and mobile telecommunications (expansion in the number of lines and upgrade to new technologies), building of new datacenters, etc.

The article also estimates that total investment in infrastructure will be as high as R$ 143 bn.

This high amount reflects two factors: the expected big increase in demand for connections during the WC 2014 and the current bad quality of Brazilian Telecom companies.

The days of major events of the World Cup (such as open and final games) should register record number of phone calls and internet connections. In the opening of the Olympic Games 2008 in Beijing, there were 220,000 simultaneous calls and connections; today, the entire city of Sao Paulo, the busiest in Brazil, registers between 60 and 80,000 simultaneous connections.

Governments and private companies will have a challenge: to provide this massive availability of services during the Cup, without having to deal with a  large unused legacy after the event. A few months ago, the Federal Government passed a law to recreate Telebras (the former holding company  of the State owned phone companies) and charge it with the job of creating and deploying, until 2014, a National Broadband Plan.

The article makes indirect references to the current low quality of Brazilian Telecom services. “In 2014, tourists will bring their 4G cellular phones, and we will have to be ready to offer them this service”, declared the director of a Telecom.

Brazilians are still getting used to 3G, which operators still advertise as “the newest marvel in mobile technology”; there is no mention of commercial 4G in Brazil.

Service for 3G is expensive. The table below shows prices charged early this year (January 2010)  by Vivo, the largest 3G operator in Brazil; a direct link was not placed because operators seem to hide their price tables – the prices were quoted from this site.

Notice that there is a promotional price for the first 3 months, then normal prices apply (a trick to bind clients to a long term contract). Packages start with an allowance of 50 MB per month, and go all the way to unlimited plans – however, Vivo and all other operators put in the contract that, if the traffic of your “unlimited plan” goes beyond a certain level, Vivo will restrict the data transfer rate.

Besides Vivo, the other major operators of telecom in Brazil are Oi Telecom (the biggest one, if we include fixed and mobile lines, but nonetheless the worst company of all), Claro and TIM.

This entry was posted on Wednesday, July 21st, 2010 at 2:43 pm and is filed under business, infrastructure.