Mobile Content Market in Brazil 2009 Research

Mobile Content Market
in Brazil
Report 2009
Mobile Content Observatory in Brazil
September 2009
Partners
In collaboration with

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MOBILE CONTENT MARKET IN BRAZIL
Copyright © Politecnico di Milano – Department of management, economics and industrial engineering
1
pages
Index
Executive Summary 5
1. Mobile Content supply: an overall picture 7
Technology platforms ‰‰ 7
Types of service ‰‰ 8
Charging Systems ‰‰ 8
Modes of delivery ‰‰ 9
Activation channels ‰‰ 10
Pricing policies ‰‰ 10
2. Players in the Mobile Content Value Chain 13
Telcos ‰‰ 13
Traditional Publishers ‰‰ 15
Web Editors ‰‰ 16
Pure Players ‰‰ 17
3. Mobile Tv and Video Infotainment Services 27
4. Music and Audio Infotainment Services 31
5. Other Infotainment Services 33
6. Customization Services 35
7. Gaming Services 37
8. Communication & community Services 39
9. Interaction Services 41
10. Current Trends and Future Scenarios 43
Appendix A. Introduction to the Country 47
The country: general information ‰‰ 47
The Mobile Telecom Market in Brazil ‰‰ 48
Appendix B. A comparative analysis of the Brazilian & Italian market 49
Appendix C. International Regulatory overview 53
A note on Methodology 55
Copyright and use of the contents
The Report could not be object of dissemination, reproduction and publication, also for via data
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The violation of such prohibition will involve the right for the DIG to obtain the compensation
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The workgroup 57
The School of Management 59
The Politecnico di Milano School of Management ‰‰ 59
The‰‰ ICT & Management Observatories 59
The MIP Business School‰‰ 60
Our Research Sponsorship 61

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Figure 1.1 8
Figure 1.2 8
Figure 1.3 9
Figure 1.4 9
Figure 1.5 10
Figure 1.6 10
Figure 1.7 11
Figure 1.8 11
Figure 2.1 13
Figure 2.2 13
Figure 3.1 27
Figure 3.2 27
Figure 3.3 28
Figure 3.4 28
Figure 5.1 33
Figure 5.2 34
Figure 6.1 35
Figure 8.1 39
Figure 8.2 39
Table A.1 47
Table A.2 47
Figure A.1 48
Figure B.1 49
Figure B.2 49
Figure B.3 52
Figure B.4 52
Figure B.5 52
Figure B.6 53
Figure B.7 53
Index of Figures and Tables
The weigh of different technological platforms
Distribution of services by type of content
Charged and Free services
Payment channels
Mode of delivery of services
Activation channels
Prices of Customization services
Prices of Infotainment services
Distribution of supplier by type
Services by type of supplier
Video services by type of supplier
Types of Infotainment Mobile Tv and Video services
Infotainment Mobile Tv and Video services by type of content
Infotainment Mobile Tv and Video services by type of content
Other Infotainment Micro-browsing based services by type of supplier
Other Infotainment Sms-based services by type of supplier
Types of Customization Services
Communication & community services by technological platform
Types of Communication & community services
Macroeconomical Data
Digital channel data
Brazilian Telcos’ market share
Number of services and type of content in each country
Types of service in each country
Service by technology platform in each country
Services by payment channel in each country
Number and types of supplier in each country
Weight of each type of supplier in each country
Services by type of supplier in each country
pages

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Executive Summary
Brazil is the largest country in LATAM, and
inthelastdecadehasattainedreassuringsta-
bility from an economic and political point
of view, characterized by constant and sus-
tainable growth of national income, reduc-
tion of income distribution disparities, and
a general improvement of social welfare.
The Mobile market in Brazil is rapidly
growing, with SIM card penetration lev-
els reaching 80% in 2008. Moreover, the
recent introduction of 3G networks, that
has presently achieved 1.35% penetra-
tion in the country, will certainly help to
keep subscriber gains positive in the near
future. Brazilian Telcos are already aware
that market saturation is an inevitable out-
come, and competition-driven decline in
voice revenue is possible in the short term.
For this reason, value-added services, and
particularly Mobile Content, become stra-
tegically relevant.
On the other hand, it is necessary to point
out a few market structural characteristics
that may hold back the development of the
Mobile Content market. In particular we
would like to highlight some of them: the
prevalence of rather low-performance de-
vices, the high incidence of prepaid users
(up to 80% of all subscribers), and a low
average ARPU.
Our research - based on a census survey
analyzing 3,678 services offered by 291
suppliers, together with 39 interviews with
all the main players – reveals that the sup-
ply of Mobile Content services in Brazil is
characterized by a remarkably high degree
of content quality and numerous value
propositions that creatively aim to trans-
form the market’s economical and tech-
nological limitations into opportunities.
Similarly, a nurturing environment that
blends national Media and Web compa-
nies’ brand and market knowledge assets
with international players’ proven experi-
ence and operational know-how, generate
an extremely rich and diversified value
chain. Moreover, it is necessary to under-
line some specific market strengths like
good performance of the Sms channel and
Customization services, as well as a rich
and variegated Micro-browsing based sup-
ply and presence of innovative multime-
dia services, including Video, Games and
Music. Alongside these positive factors
however, there are also a number of critical
points that need to be resolved in order to
allow proper market development, includ-
ing limits of the technological infrastruc-
ture, pricing policy for Micro-browsing,
and tax and regulatory policies.
We believe that the Brazilian Mobile
Content market is among the most at-
tractive worldwide and is destined to be
in constant development, especially with
adequate management of the decelerating
factors cited above.

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1. Mobile Content supply: an overall
picture
A total of 3,678 services offered by 291 suppliers were identified and analyzed in the
Brazilian market1
. These numbers are the result of a considerable growth trend experi-
enced during the 2007-2008 biennium.
Technology platforms
Micro-browsing is the most common technological platform for offering Mobile Content
in Brazil, accounting for 40% of the analyzed services. Sms (32%) and Download (23%)
are also very relevant. Streaming represents 4% of services surveyed. Innovative techno-
logical platforms, such as SBTVD2
(Digital Tv broadcasting) (1%), Mms, Client-Server
applications and Ringbacktones (all smaller than 1%) are marginal.
The predominant Micro-browsing represents a solid and rich-quality supply of Media
and Web companies’ M-Sites (both On portal and Off portal) developed in partnership
with Telcos since the dawn of WAP technology in the country. The relevance of such a
supply is even more impressive given the potentially negative combined effect of high
costs and confusing data-traffic pricing policies typical of the market.
On the other hand, with a smaller number of services based on Sms technology, it is
widely regarded as the platform responsible for the majority of revenues. The driver be-
hind this situation is the simplicity of this technology, which makes it appropriate for
the low-cost device park and accessible even for users who are not capable of using a
M-Portal. Even if Sms pricing policies are much clearer than data traffic pricing policies
for Download and Micro-browsing, cost issues still hinder a wider diffusion of text mes-
saging as an alternative to voice calls for personal communication and, consequently, as
a Mobile Content technology platform.
Finally, the diffusion of Download and Streaming technological platforms is somewhat
hindered by the already mentioned high costs of data traffic. This situation is expected
to change in the short term however, as 3G networks are rolled out and less costly data
plans with simpler charging schemes become more common.
For Streaming, an additional relevant barrier is the lack of sophisticated devices able to
support this technology. In fact, there is already a well-established Streaming-based sup-
ply, mainly pushed by Telcos wishing to showcase the possibilities of 3G technology in
its commercial release.
The limited role of the SBTVD technological platform will likely not see any significant
changes in the near future, unless there is a concentrated effort by the whole ecosystem,
led by the main Media players, to diffuse it. The key variable in this equation seems to be
the Digital Tv’s interactivity capability, which is intrinsic to the Mobile environment. In
this scenario, there is even the possibility that Mobile Tv will help drive the still flicker-
ing diffusion of Digital Tv in the country.
1
See “A Note on
Methodology” for
definition of services,
definition of supplier
and time period of the
Research.
2
Sistema Brasileiro
de Televisão Digital,
Brasilian Digital Tv
System.

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Capitolo 1 Mobile Content supply: an overall picture
Types of service
The vast majority of the analyzed services is Infotainment: almost 4 out of 5 services
(79%) belong to this category. This situation reflects the solid participation of Media and
Web companies as content providers and retailers in the Mobile Content value chain, as
well as the importance of the Micro-browsing platform for Infotainment.
Less representative are the Customization services (11%), although they play an impor-
tant role in terms of revenues. This reduced offering is related to a relatively low participa-
tion of Pure Players in the market and issues of high data traffic costs for multimedia-rich
Customization services.
Other content types are less relevant numerically: the remaining 10% of the offering
is comprised of Gaming (5%), Communication & community (4%), and Betting (1%).
However, Gaming and Communication & community content is expected to grow sub-
stantially in the medium term, while Reverse Auction services already have a substantial
impact on revenues all over the value chain.
Charging Systems
While premium Mobile Content represents the majority of the analyzed supply (58%),
the fact that the complementary 42% of the services are free of charge to the consum-
er is a remarkable phenomenon of this market. This portion is mostly related to the
Infotainment category offered by Media and Web companies interested in taking ad-
vantage of an alternative delivery channel through Micro-browsing, and is partially sup-
ported by sharing revenues from data transmission, particularly for the most relevant
players in the market, and On and Off portal display advertising.
Figure 1.1
The weigh
of different
technological
platforms
Figure 1.2
Distribution of
services by type of
content
Base: 3.678 services
Other
Download
Micro-browsing
Mms
Sms
Streaming
Client Server
23%
1%
<1%
<1%
40%
32%
4%
<1%
SBTVD
Infotainment
Customization
Communication
and Community
11%
4%1%
Gaming
79%
Betting
5%

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Capitolo 1Mobile Content supply: an overall picture
Figure 1.3
Charged and Free
services
Figure 1.4
Payment channels
The most frequently used charging model is MT Premium (78% of analyzed services),
even if the Sms billing failure rate is still considered high if compared to international
standards. WAP Billing is also common (27%) and mostly related to On portal supply.
Finally, even MO Premium charging is not unusual (13%), as this model is employed
by numerous Interactivity services (such as quizzes) and simple Infotainment and
Customization services using the single buy pricing scheme.
Modes of delivery
Almost three quarters (74%) of analyzed services are Pull-delivered, largely represent-
ing the single buy pricing scheme. Pull-delivered services are increasingly relevant,
with emergent subscription pricing models such as subscription-with-credits3
and
subscription-by-time-period4
.
A significant part of the analyzed supply is Push-delivered (21%), a model intrinsically
related to widely diffused Sms Infotainment content offered in the traditional subscrip-
tion pricing scheme. The remaining services are delivered through a Push & Pull model
(5%), as many services give the possibility to choose between single buy and subscription
pricing schemes.
3
In these pricing
models, users are
periodically charged
(usually weekly) and
receive a certain
number of credits,
which can be then
exchanged for Mobile
Content.
4
In these services, users
pay a fee to access
Mobile Content for a
defined time period,
usually weekly.
Free
Charged
Base: 3.678 servicesBase: 3.678 services
58%
42%
0
10
20
30
40
60
90
MO
Premium
MT
Premium
Wap
billing
50
70
Credit
Card
IVR
Fixed
Line
IVR
Mobile
Line
Pay Pal Scratch
Card
Other
80
13%
78%
27%
1% 0% 0% <1% 0% 1%

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Capitolo 1 Mobile Content supply: an overall picture
Activation channels
Among the analyzed services, the leading activation channel is the Web Portal (65%), in
line with the relatively wide Internet diffusion in the country and the lower costs of Web-
based advertisement compared to traditional media. The already mentioned significant
On and Off portal supply is reflected in the fact that M-Portal is the activation channel
for more than half of the analyzed supply (57%). Moreover adaptive M-Portals, already
diffused in the market, are able to show only that Mobile Content which the accessing
device is capable of actually using, thus greatly increasing convenience for the user.
Sms to Short Number is also an expressive activation option (50%). Sms-activated serv-
ices tend to be advertised mainly through the Web channel, favored by perceived high
costs of traditional media advertisement, especially nation-wide Tv broadcasting. Call
Center (11%) and SAT (9%) activation channels are used mainly by Telcos. Finally, it is
worth mentioning the absence of IVR as activation channel for Mobile Content serv-
ices, although it is considered relevant for services involving interaction with media
(which were not included in the survey).
Pricing policies
The charts below illustrate the analysis of prices, expressed in Euros and R$, in reference
to different Mobile Content categories. For multimedia-rich services, the relevant costs
of data transfer, strongly related to different data traffic plans, must be added. However,
it is important to note that Telcos in Brazil are starting to experiment with special areas
in their M-Portals where data traffic prices are reduced or even free.
Figure 1.6
Activation channels
0
10
20
30
40
60
70
IVR from
Mobile
Web Portal
Sms/Mms to Short Number
50
M-Portal/M-Site
IVR Short number from
Mobile
SAT
Call center
IVR from
fixed line
Other
0% 0% 0% 0% 0% 1%
Web Portal via Dialer
IVR Short number from
fixed line
65%
11%
9%
57%
50%
Figure 1.5
Modes of delivery of
services
Push
Pull
21%
74%
Push & Pull 5%

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Capitolo 1Mobile Content supply: an overall picture
The prices of Infotainment services follow the same logic. On average, rich multimedia
content, like Video and Full Track music, costs more, while simple Text-based services
are the least expensive. The maximum prices in the chart mostly represent Adult content,
which is deemed by the key market actors interviewed as the type of Mobile Content for
which consumer willingness to pay is higher.
Figure 1.7
Prices of
Customization
services
(Exchange rate as of
1st March 2009)
Figure 1.8
Prices of
Infotainment
services
(Exchange rate as of
1st March 2009
Audio Image Text Video Fulltrack
Base: 662 services
€ 0.00
€ 0.50
€ 1.00
€ 1.50
€ 2.00
€ 2.50
€ 3.00
€ 3.50
Minimum Price
Maximum Price
Average Price
R$ 0.00
R$ 2.00
R$ 4.00
R$ 6.00
R$ 8.00
R$ 10.00
Logo/Picture
Logo Animated
Monophonic
Polyphonic
Truetone
Screensaver
Theme
Videoringtone
Wallpaper
Base: 338 services
€ 0.00
€ 0.50
€ 1.00
€ 1.50
€ 2.00
€ 2.50
€ 3.00
€ 3.50
€ 4.00
Ringbacktone
Minimum Price
Maximum Price
Average Price
R$ 0.00
R$ 2.00
R$ 4.00
R$ 6.00
R$ 8.00
R$ 10.00
R$ 12.00
Among Customization service categories, the most expensive are innovative and experi-
mental multimedia services such as Videoringtones, Truetones and Ringbacktones. Less
sophisticated services like Logo/Picture, Logo/Animated, and Monophonic ringtones
are considerably cheaper on average.

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2. Players in the Mobile Content Value
Chain
Brazilian Mobile Content market analysis revealed a total of 291 suppliers. Half of the
suppliers belong to the Traditional Publisher category (50%), which includes Media com-
panies. The second largest supplier category is that of Web Editors (27%). The following
categories are Pure Players (20%), including mainly Mcsps1
, and Telcos (3%).
1
Mcsp stands for
Mobile Content and
Service Providers.
Figure 2.1
Distribution of
supplier by type
Figure 2.2
Services by type of
supplier
When the service offering is considered, it can be seen that two categories of suppli-
ers are responsible for more than 60% of the services: Traditional Publisher (31%), and
Telcos (30%). The rest of the supply is divided among Web Editors (23%) and Pure Players
(16%).
It is important to highlight a substantially high level of supply concentration among a
few players in the Traditional Publisher and Other and Web Editors categories. In fact,
four Web companies offer more than 60% of the services in the Web Editors segment,
while only two national Media companies offer approximately 45% of the services in the
Traditional Publisher category.
Telcos
Telcos are extremely relevant in terms of service offering (30%). These players have a
varied and rich-quality Mobile Content supply, covering all content types and delivery
technologies. Traditional services, namely Sms Infotainment and Customization, rep-
resent the main revenue segments for Telcos, a fact compatible with technological and
socio-economic market characteristics.
Base: 291 suppliersBase: 291 suppliers
Telco
Pure Player
3%
20%
Traditional Publisher
50%
Web Editor 27%
Telco
Pure Player
30%
16%
31%
Web Editor 23%

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Players in the Mobile Content Value ChainCapitolo 2
Furthermore, in contrast to the majority of other players, Telcos tend to invest heavily
in innovative and multimedia services. In fact, the Music Store tends to be the single
most important M-Portal section for the Telcos, which go to great lengths to promote
their Mobile Music supply. For instance, Vivo is known for promoting artists by releas-
ing exclusive songs in its M-Portal, and TIM is the sponsor of a large music festival.
Similarly, the supply of JAVA-based Games in Telcos’ M-Portals is diversified, and while
revenues for this segment are still modest, they show the potential to increase in the me-
dium term. Moreover, the four main Telcos have a robust Video and Mobile Tv supply,
including content produced by most national Tv and independent video producers, as
well as partnerships with international Tv channels. Finally, some Telcos fostered the de-
velopment of Communication & community services focused on production and share
of user-generated content and made deals with international Web Companies such as
Google, Yahoo!, Facebook and MSN, to establish their presence in the M-Portals. This
orientation towards rich-media services is clearly aligned with the recent commercial
introduction of 3G networks.
Central to the Mobile Content value chain, Telcos articulate key partnerships with Mcsps,
Traditional Publishers, and Web Editors. In the past, faced by intense competition in
the voice segment, Telcos’ investments in and attention to the Mobile Content segment
were not on par with its strategic importance. However, this situation has experienced
constant and decisive improvement in the last few years, as evidenced by consequential
initiatives regarding supply and content management, infra-structure deployment and
Telco’s vigorous push into broadband offering in 2008.
In the area of supply and content management, the following initiatives may be high-
lighted as representative of the trend to propel the Mobile Content market:
intensification and improvement of editorial control and planning for the supply of‰‰
content which the Telcos consider strategic (namely, multimedia-rich content);
allocation of sizeable investments for marketing and promotion of specific high value-‰‰
added content typologies (such as Mobile Music and Games);
openingM-Portalstothirdparties,bothintermsofspecificsectionsunderthepartners’‰‰
brand for direct B2c content supply and indirect (white label) content provision
(especially traditional content such as Sms Infotainment and Customization);
outsourcing technology platform management of specific areas of the M-Portals; and‰‰
strengthening links with Integrators to reduce technological and business complexity‰‰
for the other players in the value chain.
Moreover, Telcos have developed the infrastructure needed for Mobile Content retailing.
Specific initiatives in this direction include:
the development of adaptive M-Portals with different interfaces and content offers‰‰
according to the user’s Mobile device capabilities; and
the implementation of new technological platforms that may allow for novel business‰‰
models and value propositions, such as time-based data charging or different data
charging schemes according to the M-Portal section at hand.
Finally, a third trend illustrating a growing interest on the part of Telcos in VAS revenues
in general, and more specifically in Mobile Content, is the coordinated efforts these play-
ers are orchestrating to encourage Mobile Internet diffusion, primarily in the form of
Mobile Broadband access, immediately after the launch of commercial 3G technology. It
is also worth mentioning that these efforts are aligned with the government’s own initia-
tives to bridge the digital divide in the country.
However, in order to further promote market growth, Telcos should address issues other
than value chain articulation and new services adoption. A first growth barrier identi-
fied is the lagging technological infra-structure behind the reportedly high failure rates

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Players in the Mobile Content Value Chain Capitolo 2
in content billing and delivery. Although Telcos have been reportedly improving it for
the past few years, the issue is still unresolved, and a positive outcome will certainly help
all players dealing in Mobile Content.
A second issue that Telcos can address to foster market growth is pricing policy. High
consumer prices for data transmission combined with confused charging schemes cer-
tainly inhibit Mobile Content acquisition. Some Telcos are already experimenting with
specific sections inside their M-Portals where data transmission is free of charge, a deci-
sively positive trend that has brought excellent results internationally.
Finally, contrary to the global tendency, at the end of 2008 the Brazilian telecommunica-
tions regulatory agency still had not established formal rules for Mobile Virtual Network
Operators (MVNO) register and operation, and there is no clear prognosis for this issue
in the near future.
On the other hand, 2008 saw the start of Mobile number portability in the country.
More than intensifying the Telcos’ struggle for customer satisfaction, this evolution may
indirectly impact the Mobile Content value chain through the establishment of an in-
tegrative infra-structural layer to enable portability that may serve as a basis for future
integration in the fields of service management, billing and delivery.
Traditional Publishers
This is the main category of suppliers in the Brazilian Mobile Content market, account-
ing for 50% of the suppliers and 31% of the services. These numbers reflect a strong pres-
ence of large Media companies, which on one hand play the role of content providers at
the beginning of the value chain, and on the other hand engage in direct retailing using
their nationwide reach, well known brands and reputation to publicize a thriving offer-
ing. Recently, the market witnessed relevant mergers, acquisitions and joint ventures.
These moves can be summarized as:
joint ventures by Media companies and Mobile-specific players in order to strengthen‰‰
their position in the Mobile environment and expand delivery channels; and
Media and Web companies reorganizing internally in order to leverage brands and‰‰
assets to be used in the Mobile Content market.
The mainstay of these players is obviously traditional Infotainment content offered
through subscription-based Sms channels and rich-quality Mobile Internet and M-Sites.
An important driver for the development of this rich Micro-browsing supply was long-
standing agreements established with Telcos for sharing data traffic revenue, which pro-
moted the creation of content-rich sites and attractive brands such as those developed
by Media companies. As there is evidence that this particular revenue share model will
probably be discontinued in the near future, Media companies are already preparing a
move toward advertisement-based Mobile Internet.
Notwithstanding, Media companies also experiment with content not directly related to
their main informational businesses, such as Sms-based quiz gaming, and even highly
innovative formats. Famous Media brands are also exploited through services offering
bundled Infotainment and Customization content, which became popular during the
course of 2008, especially when linked to certain popular Tv shows and special events.
Another positive aspect of Media companies’ presence in the Mobile Content value
chain is that their far-reaching interactive services massively publicize the use of text
messaging, promoting Mobile Content awareness and educating consumers on technol-
ogy use.

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16
It is worth mentioning that Media companies in general, and Tv broadcasters in particu-
lar, follow the overall market caution regarding Streaming-based Mobile Video content.
Thebasisforsuchcautionismainlyrelatedtotechnology(limitedmultimediacapabilities
of the vast majority of Mobile devices and limited 3G diffusion), but also to the content
format itself. There is still much uncertainty as to whether or not traditional Tv formats
can be carried over to the Mobile environment, given the characteristics of mobility, and
as to which formats and propositions can effectively create value for the Mobile user.
This caution is natural given their primary role as Content Providers for Mobile Video
services, who leverage on their internal production resources and renowned nationwide
brands, and experiment with formats suited to mobility.
Moreover, Traditional Publishers are uncertain about the SBTVD system, which allows
direct free broadcast of Digital Tv signals to Mobile devices. The reasons for this are
not only technological, but also related to business propositions. On one hand, too few
Mobile device models capable of receiving the SBTVD signal are being commercialized,
with prices for such devices being excessive for the Brazilian average consumer. On the
other hand, there is much uncertainty regarding prospective revenue models and the
role of different players, as there are no data traffic revenues involved and options to offer
premium content are limited.
Web Editors
Web Editors respond for 27% of suppliers by number, and 23% of the offering by number
of services. These players usually are engaged in two roles of the value chain. Firstly, as
direct content retailers, these players went to great efforts to transfer in the most accurate
manner possible their information assets to the Mobile channel in order to capitalize on
their web audiences, resulting in a variegated supply of Sms Infotainment and rich-qual-
ity Off portal Infotainment. These M-Sites, in particular, benefited from the data traffic
revenue share agreements discussed earlier. Nonetheless, Web Editors are preparing to
change their business models in order to leverage on their large audiences and exploit the
opportunities of display advertising and Mobile Marketing promotions.
Besides direct retailing, Web Editors play a fundamental role as content providers.
Indeed, some large Brazilian Web companies are considered key partners by the Telcos,
as they provide Infotainment content in special areas inside Telco M-Portals, such as
news coverage for special events (Carnival, Elections, Olympics, to name a few). Also
the main international Web companies play the role of content providers, with Yahoo!,
Google and MSN present in the Telco’s M-Portals providing Social Network, Instant
Messaging, E-Mail and Video services.
While Infotainment services (especially subscription-based Sms channels) form the core
of Web Editors’ Mobile Content supply, other content categories, such as Customization,
are perceived as complementary services. As Web Editors usually do not have internal
competences to create this kind of complementary content, partnerships with Mobile
Content & Service Providers become a necessity. Even if the large Web Editors tend to be
capable of independently managing their own services and connections with the Telcos,
partnerships with Mcsps for service management help them concentrate on the activi-
ties in which they excel. Moreover, Web Editors seem to be investing more than Media
companies in Video content and Mobile Tv, taking advantage of competences acquired
while developing similar content for their Web proprieties.

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Pure Players
In numerical terms, the presence of Pure Players, represented almost exclusively by
Mcsps, is somewhat dwarfed by Media and Web companies, accounting for 20% of the
suppliers, and 16% of the offering. However, they have a fundamental role to play in
fostering market growth. In a direct business-to-consumer function, Mcsps were re-
sponsible for the introduction of innovative business models such as those based on
subscription pricing schemes or content bundle propositions, and are expected in the
short term to help increase awareness for Mobile Content by intensifying advertisement
in traditional media channels, particularly Tv. This is particularly true for a subcategory
of Mcsps in the Brazilian market comprised of international companies engaged mostly
in Mobile Content retailing. They leverage mostly on marketing competences and op-
erational know-how developed from years of experience in foreign markets, but some of
these players also boast large portfolios of tested Mobile Content backed by internation-
ally renowned brands. In most cases, these companies entered the Brazilian market only
recently, but have already carved out a prominent position in the market.
At the same time, in an indirect business-to-business function, Mcsps ease technological
complexity in the value chain by centralizing the points of contact with the Telcos: they
handle direct connections, operate billing and reporting systems, and manage access
to and use of short numbers. This function is exercised mainly by Integrators, native
companies present in the market since its beginning in the 2000s. These players initially
focused on providing Telcos with technical infra-structure and management services for
value-added services, and effectively carved technological niches for themselves. As the
market expanded, some diversified operations and experimented also with direct retail-
ing, but most Brazilian Mcsps tended to specialize on their technical core competences,
benefiting from long-established relationships with Telcos and profound knowledge
about the market dynamics and peculiarities.
Furthermore, a few strategic considerations can be drawn regarding Mcsps. A first no-
ticeable trend regarding the positioning of Brazilian Mcsps is a movement towards mar-
ket consolidation and aggregation which saw, since 2005, a number of significant merges
and acquisitions among companies with complementary core competences and assets.
A second consideration regarding Mcsps in Brazil is their creativity in developing novel
business propositions.
Similarly, almost all Mcsp players are developing their presence in the emergent Mobile
Marketing segment. While currently not generating substantial returns in terms of rev-
enue, most players recognize the importance of establishing a beachhead in this promis-
ing arena.

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Telcos
Claro
Claro is a brand of the Mexican América Móvil telecommunications group, which also owns
Telmex, Mexico’s main fixed-line operator, and Embratel, a Brazilian provider of long-distance
calls. Claro ended 2008 with 39.6 million subscribers, the second largest Mobile telecommuni-
cations provider in the country by market share (25.76%). Claro’s Mobile operations in Brazil
began in 2003, both through GSM and TDMA networks and, after November 2007, also with
UMTS and GSM/EDGE technologies. In 2008, Claro reached complete national coverage. Claro
offers Mobile Content through its Claro Ideias 3G M-Portal. Among the principal services avail-
able on the M-Portal there is Idéias Music store, with over 900 thousand of Fulltracks free of
data transmission costs, and Minha TV, offering numerous Tv channels (e.g. Bandeirantes,
Cartoon Network, Mtv, Discovery), and its self branded Mobile TV channel Ideias TV. In the
Communication & Community section, popular international services are available including
Orkut, Myspace and Youtube. Claro also offers bundle services including Music, Video and
Customization.
Oi
Waiting for approval
TIM
TIM Participações, controlled by Telecom Italia Group, has been present in the Brazilian market
since 1998. TIM is the third largest Telco in Brazil, with 36.4 million subscribers (24.2% market
share) at the end of 2008. TIM provides Mobile and fixed telephony (TIM Casa brand, in 2006,
and TIM Fixo, in 2008) and high speed Internet access (TIM Web, since 2007). In 2008, TIM
launched 3G services with the brand TIM 3G+ that enhances the usage of M-Portal. TIM is
focusing on the development of its portfolio of Music services, with TIM Music store available
free of data transmission costs, and is a sponsor of well-known music events. The supply of Mobile
Content services is compound on both self-branded services (e.g. Tim TV – self branded Mobile
Tv channel -, TIM studio – UGC area, Podcasts and Ringbacktones) and popular international
brands (e.g. Facebook, Google, Yahoo). At the end of 2008, TIM launched “101 Carros TIM”, an
Sms-based competition which, through the acquisition of a ringtone, allowed participants to
win one Peugeot 307 a day for 101 days. In 2008, Data revenues accounted for 9.7% of total gross
revenues, a 31% year-over-year increase.
Vivo
Waiting for approval

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Abril
Group Abril is one of the major Brazilian open capital media groups which, since 2006, has
been 30% owned by Naspers, a South African media company. The group owns Editora Abril,
responsible for 7 out of the top 10 most circulated Brazilian magazines, among other magazines,
achieving revenues of R$ 1.98 billion in 2007 and owns other publishing and distribution compa-
nies. The group’s digital activities (web and mobile) have been carried out by the company Abril
Digital since 2000. Abril acts in B2c Mobile content retailing, offering mainly Infotainment serv-
ices related to its magazine brands, both through its own M-site and Sms through subscription.
Its M-site aggregates not only Infotainment services but also the Customization services, Games
(e.g. quiz), Communication & community services (blog, forum, chat) of about 30 magazine
brands like Playboy and Veja, also offered through a subscription-with-credits model. Currently,
Abril Group boasts over 8,500 employees, 300 of whom are employed in Abril Digital and 25
dedicated to Mobile.
AMMB
AMMB, Associação de Mobile Marketing do Brasil is an industry association founded in 2007
following the emerging Mobile Market in the country. The main scope of the organization is
to foment the Mobile Market in general (not only Marketing but also Content, Banking, etc)
introducing standardization and best practices to enhance awareness and promote the market
development. Among the associates are: Spring Wireless, Cyclelogic, Ericsson, A-Tono, Compera
n-Time, Playphone, Responsefabrikken, WapJá, PT Inovação, PureBros, Buongiorno, Hands, Ei
Movil, Dada, Jamba, M4U, Ouvi, M1ND Lab., Supportcomm, PMovil (Toing).
Arvato Mobile
Arvato Mobile is a company focused on Mobile Montent and Interactive services, is present in 8 countries
andhasclientsinmorethan75countries.In2009,thecompanywasacquiredbyMondiaLtd.,andanAbu
DhabiGroup.
In Brazil since 2005, Arvato Mobile owns two B2C retailing brands, TJ Net, dedicated to traditional
content, and Spicy Boost, dedicated to adult content. Arvato Mobile Brazil’s focus is on Mobile
Content, more specifically in Customization services: in fact circa 70% of its revenues come from
Truetone downloads. Moreover, it also offers Videos, Games, images and Infotainment Sms
channels through a subscription-with-credits model. The company promotes its services mostly
through television – where it has developed a core competence – by sponsoring Tv programs
such as “Pânico na Tv” and sport programs. Arvato Mobile is connected to all Telcos through the
integrator Pure Bros. The brand TJ Net is present in all Telco’s Mobile portals, while Spicy Boost
is present on Oi’s. With more than 250 employees worldwide and 40 in Brazil, Arvato Mobile is
present in 8 countries and has clients in more than 75 countries.
A-Tono
A-Tono is a privately-held Italian-based Mcsp founded in 2001 as a spin-off of a company called
Goyada. It produces and aggregates Mobile Content, and manages the delivery of the service
to the final consumer. At the end of 2007 it began operations in Brazil, opening an office in
Rio de Janeiro. The company has four main business units: Marketing and Communications,
Internet and Mobile Internet, Interactive Channels, and Products, which is responsible for
Mobile Content. In Brazil, the company has only a B2c operation through its brand-name website
“Café Mobile”. The supply is composed only by Downloadable Mobile Content such as Games,
Customization (Ringtones and Wallpapers) and Infotainment (Videos). Nowadays products are
offered through a Subscription-based model. In Brazil A-Tono maintains a partnership with the
integrator PureBros. The total number of employees working in the Brazilian operations is about
5, most of whom are located in the country.
Boltcel LTDA
Boltcel LTDA is a partner of an Italian-based Mcsp David2 – a company operating since 1993
in the field of telephone VAS and having developed its Mobile Content capabilities since the
conception of this market in Italy. Boltcel started its activity in Brazil in September 2008 and is

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focused exclusively on B2c, offering bundle subscriptions (one Customization service in Download
and Infotainment Sms services) with the brand Superzig. Boltcel promotes its services mainly
in national television channels. The company develops products in-house, adapting them to the
local market (e.g. Videoringtones related to regional music, etc.). In the Brazilian market Boltcel
collaborates with Purebros for service Integration and with mWise in the matter of delivery
platform. On the global level, David2 has more than 100 employees and over 5 million customers.
In 2008 the company revenues reached € 35 million.
Buongiorno
Buongiorno is an Italian Mobile Content & Service Provider, the world leader in mobile
entertainment, and operates both with a B2c – with Blinko Gold’s brand – and B2b approach,
managing white label services for third parties (Telcos, Media Companies, etc.). The company
entered the Brazilian market in 2007, after closing an agreement with TIM for managing the
Telco’s Music Store and some months later B! started managing the Brazilian operations of
ITouch Group after the acquisition of B! to ITouch globally. In Brazil, Buongiorno is a white label
manager in the Mobile Content supply of some Media Companies and Web-Editors, as well as
some sections of Telco’s Mobile Portal (TIM Music Store, Vivo Chat, etc.). Regarding the B2c
supply, it offers Customization services, Videos, and Games through a Subscription with Credits
model to all Telco users except Vivo’s, while Sms Infotainment is offered to Vivo’s customers.
Moreover, Buongiorno intends to launch its social network service Blinko in 2009. In Brazil,
Buongiorno has 18 employees. The 2008 turnover in Latin America was more than 22 million
Euros out of an overall global turnover of 316 million Euros.
Compera nTime
Compera nTime is the union of Compera and nTime, two Brazilian companies that merged in
December 2007. The company is 49% owned by Naspers, a South African media group, while 51%
is controlled by the founding partners. The enterprise acts mainly as an integrator and platform
developer, offering connections to all Brazilian mobile operators. Compera nTime also has B2c
activities through the brands Ultramob (with an offer of Customization, Videos, Infotainment
Sms and Games), Chat Tv (a real time chat channel through television) and Diário Celular (a
social network based on a mini blog hosted by Orkut). Moreover, Compera nTime offers Mobile
marketing and corporate mobility services. The company also works for Media companies and
Telcos, managing services such as Infotainment Sms, Voting services, Customization services
and Reverse Auctions (e.g. Super Leilão Oi). Currently, the company employs approximately
110 people, and maintains an international office in Mexico, as well as business operations in
American countries, including the USA, Argentina, Chile, Peru and Uruguay. In 2009, Compera
nTime acquired Yavoxx, one of the leading Integrator companies in Brazil.
CRE8
CRE8 is a New Zealand-based Mcsp that started its operations in Brazil in 2007 with the
acquisition of MDEV. It is a Mobile Content developer acting mainly in the B2b market and
focused on the development of Communication and community applications (Instant messaging
– having developed the Windows Live Service client to Vivo and Tim in Brazil and to Telefonica
Movistar in Latin America – and UGC), and Interaction services (Voting and Quizzes) for media
companies such as Tv Barriga Verde. The company has another business line that deals with
Mobile Marketing and Mobile Service. In Brazil, along with some Media companies, CRE8 has
created partnerships with all the Music Majors and the Brazilian Telcos (TIM, Vivo and Claro).
CycleLogic
CycleLogic, Inc. is a US-based privately-held company founded in 1996 in Miami under the name
StarMedia Network, Inc. Cyclelogic works in all of Latin America and in the US with strategies
focusing on the Spanish-speaking population. The company acts mainly as an Integrator and
Content Developer, also managing services in white label. Cyclelogic has four different business
units, Mobile Marketing, Platforms, Connectivity and Product. The latter is directly responsible
for Interaction Services (mainly voting) and Mobile Content whereby the company deals with all
the traditional Mobile Content services: Infotainment (both text and video), Communication and

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community, Games (both via Sms and Download), Customization (Ringtones, Wallpapers, etc)
and Micro-browsing. In Brazil Cyclelogic has around 30 employees, and offers more than 250 Sms
channels which generate over 30 million messages a month.
Ei Movil
Ei Movil is a Venezuelan company and part of the Grupo Evenpro, present in Brazil since 2005.
In Brazil it works with three main business lines: in B2c, Ei Movil Products – content offered
under self-owned brands such as Bipie, Clube, Privê and Zubaloo; in B2b, Customized products –
designed specifically for Media companies; and finally in Mobile Marketing. Ei Movil is an Mcsp
offering Sms services as the core business. In addition, the company works as Content provider
to some other aggregators and has close partnerships with the integrators Spring Wireless, for
Sms-based services, and PMovil, for download-based. In 2007 Ei Movil launched the magazine
Zubaloo focused on the public reached previously by the same brand in the Mobile channel.
The company works in eight Latin American countries. In Brazil, it closed the 2007 year with
an average of 3 million Infotainment Sms, approximately 250 thousand downloads sent every
month, and company revenues equal to R$ 4 million (approx. € 1.8 million).
F.biz
F.biz is a Brazilian-based Digital Marketing Agency focusing on interactivity. The company has
three main business lines: Mobile, E-commerce, and Digital Campaigns. The Mobile operations,
started in 2004, are mostly related to Mobile Marketing developing solutions for announcers in
different platforms such as SMS, Wap, iPhone, Bluetooth, among others. Moreover, they manage
a system that automatically organizes the bids for the position in Brasil Telecom M-Portal. F.biz
also operated as a partner in the development of a multiplatform Game and manages Reverse
Auctions for some Telcos. In Mobile Content, they used to develop Branded M-Sites. F.biz has
120 employees, 15 of whom are completely dedicated to Mobile-related business. In 2009, F.biz
intends to expand its operations to foreign countries, especially some Sms and Mobile Internet
(Wap) based applications and an the Positioning Auctions similar to the one used by Brasil
Telecom.
Hands
Hands is a Brazilian private-owned company in operation since 1999 and part of the portfolio of
the Holding IdeiasNet. It is specialized in M-Sites development for third parties – mainly media
companies – and Mobile Advertising. Hands offers a proprietary Mobile Advertising platform
through which it currently manages around 300 M-Sites. Its business model is based on revenue-
share of advertising space with the publishers of the Hands Mobile-advertising network. Hands’
M-Site is visible on Claro’s and Vivo’s M-Portals for touch generation devices and also by users from
other carriers through Hands’ Portal. Moreover the company has a partnership with América Móvil
and manages parts of Claro Music Store (such as billing, credit verification and identification of
devices and files). The company is partly or completely responsible for the technological part of the
M-Sites of players such as Grupo Estado, Globo.mobi, Vale and Rolling Stone Magazine. Hands has
35 employees divided among M-Sites Development, Mobile Marketing and Mobile Advertisement
departments. 80% of Hands’ revenues come from the Mobile Advertising division. The company
reached 17 million pageviews in its portal during the year of 2008.
Hanzo
Hanzo is a privately-held Brazilian Mcsp founded in 2004. The company works with B2b technol-
ogy and services provision for Mobile Marketing campaigns, including management, delivery
and billing. Regarding Mobile Content, Hanzo has a Web-based platform for content personali-
zation and deployment across all carriers. Hanzo has been connected to all the Telcos in Brazil
since 2007 and has partnerships with nearly 100 Media groups, brands and advertising agencies,
among which: the Tv’s SBT and MTV, radios Radio Mix and FM O Dia; newspapers O Globo,
Jornal do Brasil and Gazeta Mercantil, internet portal IG, and retailers O Boticario and Ponto
Frio. The company manages roughly 800 services (500 content-related, 300 interaction-related).
With more than 30 employees, in 2008 Hanzo had an average growth of 13,3% per month in 2008
with predicted revenues close to € 4,5 million in 2009.

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iG
iG is a Brazilian Web-Editor that initiated operations as a free dial-up Internet access provider, in
2000, nowadays it reaches 28% of the Brazilian residences. The enterprise is privately-held, with
capital divided between IG Participações S.A., Brasil Telecom Serviços de Internet S.A. e Brasil
Telecom S.A.. It offers Mobile Content, through the B2c brand iG Celular, such as Customization,
Infotainment (Videos, Text and Images), Java Games and Chat Communities. Its services are
managed by Takenet (for Downloadable content), Yavox (for Sms Infotainment services) and
internally for the M-Site. In November 2008, the company launched a retailing model based
on subscription with credits. Few content types are produced in-house, among which, there
are the adult materials and Sms Infotainment. iG also manages the Sms channels of the online
newspaper Último Segundo. Moreover, iG offers its Infotainment Content to Vivo, Claro, Oi,
Brasil Telecom, Tim and CTBC. In total, there are 400 employees in iG Group, 8 of whom work
at iG Celular.
MoWA – Mobile Wireless Applications
MoWA – Mobile Wireless Applications is a privately-held Brazilian Mcsp founded in 1997. The
company’smainbusinesslineisMobileServiceandMobileWorkforceSolutions(withpartnerships
with groups such as Votorantim, Sadia and Kodak to name a few). MoWa has two other business
lines: Mobile Marketing and, since 2005, Mobile Content, resulting in partnerships with CBF
(Brazilian Football Federation), and the national rock bands Roupa Nova and Jota Quest. For
these clients MoWa manages in white label the supply of Mobile Content offered both in the Web
and in the Mobile and the development of their branded M-Sites. The company is present in 17
American countries and in Spain.
Neomobile
Neomobile is an Italian Mcsp which started its activities in Brazil in 2006 in B2b segment, offering
Mobile Content and Technological Support to the Brazilian Telcos. In early 2008 the company
started its B2c operations in the country and now offers weekly Bundle Subscription services
(including Downloadable Customization, Sms Infotainment and Java Games) marketed with
the brand “Dindo” and distributed through the networks of the four main Brazilian Telcos. B2c
services are based on a proprietary Sms, Wap and Web multichannel platform and are promoted
on the Web, in M-Portals and traditional Media (magazines and Tv). Neomobile has partnerships
with international and local Content providers, which guarantee a focus on national and regional
catalogue. Moreover the Company has an internal production of Crazytones related to current
Brazilian spotlight news (e.g. gossip, politics sports), thus supplying different content services
to different regions of the country. The enterprise has 12 employees in Brazil and is present in
Europe (Spain, Italy, Portugal, France, UK and Turkey), North America (Mexico and US), Asia
(China, India, Bangladesh and Japan) and Africa (Morocco). Worldwide Neomobile has active
collaborations with over 120 Telcos and more than 30 Media Companies.
One Brazil
One Brazil is a joint venture formed in 2008 between One Worldwide, which is 30% owned by the
Italian Mcsp, One Italia, who has 49% of participation and the Grupo Bandeirantes Media group
with 51%. The joint venture is responsible for all the digital strategy of the Grupo Bandeirantes.
Regarding Mobile, the company manages Interaction services (e.g. quizzes) and Reverse Auctions
but also offers traditional Mobile Content such as Games, Customization and Infotainment Sms
services retailed in bundle packages with its own B2c retailing brand, Leo Mobile. One Brasil
uses the integrators Spring Wireless and Pure Bros to connect to the Telcos, besides, having
agreements with Universal Music and independent studios. The company has 20 employees.
Ouvi
Ouvi is a Brazilian Mcsp founded in 2004 and owned by the Norwegian Private Equity fund
Diem Telekom AS. The company approaches the B2c Mobile Content market using the brand
“Ouvi” and has a proprietary download platform, which supports all types of content and is

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connected to all Brazilian Telcos. The brand offers Sms-based Infotainment and Download-
based customization services, as well as Sms-based interaction services and white labeling
Mobile Content to third parties. In 2008 the group expanded its activities through the launch
of another Mcsp, Atope, which deals with Mobile Marketing actions such as development of
applications and advergames, SMS and Bluetooth Advertising, development of branded M-Sites
as well as some Mobile Service initiatives.
Pinuts Studios
Pinuts Studios is a Brazilian privately-held company founded in 2006. The company works
in the B2b realm acting mainly as a Technology provider and Content Developer focused on
Mobile Development Outsourcing. Pinuts develops multimedia Mobile Content services, such
as Applications, platforms to facilitate internal management of Mobile-related activities for both
Mobile Marketing and Mobile Content, M-Sites, LBS services and Games (in J2ME, Brew and
other platforms). Furthermore the company produces and deals with the porting of Applications
including Games On demand. Pinuts has clients such as Spring Wireless, Compera nTime,
Arena Mobile and ResponsFabrikken. Moreover, they have entries in the public sector through a
partnership with CIATEC, a project from Campinas City Hall. From 2007 to 2008 the company
displayed a 200% growth and it now has 20 employees.
PMovil
PMovil is an Argentinean-Brazilian closed-capital Mcsp founded in 2001. It owns the retailing
brand “Toing” whose main focus is branded Infotainment (mainly Images and Videos) and
Ringtones for which the company holds contracts with the Music Majors and some independent
labels. PMovil is present in all Telco M-Portals. With an M-Site that allows the activation of the
services in Subscription on its B2b operations, PMovil acts as technology platform developer,
white label Content manager and M-Site manager. Furthermore the company recently developed
a Mobile Advertising network and expects to achieve an audience of 50 million users in Latin
America. In Brazil, PMovil has partnerships with, among others, Terra, Yahoo, Bandeirantes,
SBT Celular, and RBS group, and over 30 Telcos in Latin America. The company currently has
60 employees in Brazil and maintains an international presence in other 14 Latin American
countries. Moreover, PMovil also has plans to expand in Central America, Africa and Asia.
Praesto Converge
Praesto Converge is a Brazilian privately-held company founded in 2004. Its focus is in Mobile
Marketing solutions. Regarding Mobile Content, it develops Infotainment applications, such
as Vôos Mobile and JMobi (mobile sites aggregator), as well as M-Sites. The company also has
partnerships with integrators and advertising agencies, such as F.biz, developing M-Sites and
applications for their clients. Complementarily, they also provide this service directly to small
and medium-sized enterprises. Moreover, using an advertisement-based model, it offers B2c
services through downloadable applications and M-Sites. Praesto Convergence currently has
sixteen employees and during 2008, all the M-Sites developed and operated by the company have
reached a monthly usage of 3 million page views.
Pure Bros
Pure Bros is an Mcsp founded in 2006. The company works exclusively in B2b as an Integrator,
offering connections to all the Telcos, and managing mainly Download-based services. The
company has direct connections to distribute Mobile Content to all the Brazilian Telcos,
sometimes also offering Technology and Project Management services. In 2008 it started offering
platforms for Reverse Auctions, Sms-based Chat, and Mobile Marketing. In 2009 it introduced
a WAP billing platform. Furthermore Pure Bros manages billing services for other Mcsps on
behalf of Telcos like TIM, Vivo, Oi and Claro. They also offer Mobile Marketing Platforms in
which they are connected to Claro and Oi. Pure Bros is internationally present in Italy and
Mexico, in which it is starting the office. Pure Bros employees number 60 in Brazil and seven in
Italy apart from the Mexico ones.

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RBS Celular
RBS is a Brazilian media group, operating since 1957, whose activities include television,
newspaper, radio and internet. Its Mobile division, RBS Celular, was launched in 2006 and now
owns the brands “Hagah Celular” and “ClicRBS Mobile” portals. Moreover, in November 2008
they acquired PontoMobi, thereby entering the Mobile Marketing business. RBS offers a portfolio
of Customization, Sms and M-Browsing based Infotainment in subscription mostly leveraging
on their media assets. In 2008 the company had an average of 50,000 monthly page views and
11,000 regular users on its M-Site page. RBS has partnerships with three Integrators based on the
content to be managed: PMovil is the supplier of Downloadable Content and content adaptation,
Spring Wireless manages Sms-based and Interactivity services. RBS content is distributed mainly
in a Subscription model. The company is present mainly in the Brazilian South region and has
two employees dedicated to the Mobile division.
ResponsFabrikken
ResponsFabrikken is a Danish company founded in 2001. It started its Brazilian operations in
2005 by establishing a partnership with Octagon Koch Tavares, a Brazilian company specialized
in sports marketing and events. The company is focused on Interaction services based on Micro-
browsing and Sms and it is the pioneer in the implementation of Reverse Auctions in Brazil.
Moreover, it offers Sms Quizzes based on a Subscription model to Media companies. The company
works exclusively in the B2b segment, with Tv broadcasters, such as Bandeirantes, Record and
SBT, and some Telcos as its main clients. They have connections to all the Brazilian Telcos as well.
ResponsFabrikken has 62 employees and, during 2008, it generated revenues of R$ 22 million
(approx. € 7.5 million).
Rogabe
RoGaBe is a Brazilian company that started operations in 2002, in Campinas (SP). The company
is a Developer focused in the porting of international players’ Java Games and the distribution of
licensed Game titles and Mobile Applications. RoGaBe has agreements with many international
Game Developers such as Eletronic Arts, Digital Chocolate, Glu and Skyzone. In 2008 RoGaBe
started its operations in the Mobile Marketing and Advertising segment by developing a
platform that offers Mobile Content (Games, Videos and Wallpapers) through Download based
on advertising and thus free for the end user. Currently, the company offers more than 200 Game
titles, adapted for 60 different types of mobile devices, totaliing a variety of 12,000 stock-keeping
units. By 2004, the company commenced its international operations with the opening of an
office in Chile.
SBT
Founded in 1981, SBT is one of the largest Brazilian television channels. Since 2000, the company
started to invest in interactivity and mobility, then retailing Mobile Content through the brand
Mega SBT, providing mainly Infotainment Services delivered via Sms (such as News, Horoscope,
Religious, Sports, etc) and Voice based Content (Chat & Games). The Italian Mcsp Buongiorno
was the responsible for the developed of the Sms Services and nowadays is SBT’s most important
partner to which it has a Revenue Sharing agreement. In 2009 MegaSBT supply is to be provided by
other Italian Mcsp, Dada, and the company introduce a new business model based on Subscription
with credits that leverages mostly on Dada’s portfolio and on some SBT brands. SBT also acts as a
Content Provider of Infotainment Video services for Claro’s and Vivo’s M-Portals and its Mobile
Business unit has four employees.
Spring Wireless
Spring Wireless is a Brazilian, privately-held Mcsp, founded in 2001. In August 2008 the
company received a boost of ¤ 50 million with the entrance of two new partners: the Bank,
Goldman Sachs and the American Venture Capital company, New Enterprise Associates (NEA).
In the same month the company bought the Brazilian Mcsp, Okto. In Brazil, the company’s
Mobile activities are focused on providing services to media and content companies, advertising
agencies, consumer products companies and financial services institutions to communicate and
interact with their end customers and employees. It acts as an Integrator, offering connections to

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the Telcos (Sms and WAP gateways, and download platforms), delivery management and billing.
The company operates in both Mobile Content and Mobile Marketing & Service businesses. In
2008, Okto started an internationalization strategy by entering the Mexican Mobile market,
and in 2007 the new Spring Wireless branch achieved revenues of R$ 35 million (approx. ¤ 13
million), 60% related to Mobile Content and 40% to Mobile Marketing & Services, a 100% growth
over 2006, 90% of which came from their Sms gateway services. In total, Spring Wireless has
750 employees. In 2008, the estimated revenues (including Okto’s) were around R$ 300 million
(approx. € 100 million).
TecToy S/A
TecToy S/A is an electronic company founded in São Paulo in 1987. The company launched its
Mobile division, TecToy Mobile, in 2005. The enterprise both aggregate and publish Games
produced by internal development in Brazil and the development and porting of Java Games.
They also license local IP for Mobile Game developers and provide Customization content
such as Ringtones and Wallpapers based on national and international licenses. The company
distributes content through carriers’ B2C M-Portal with a supply of more than 50 different titles
in 2008.
Universal Music Group
Universal Music Group is the largest Major label in the music industry, with roughly 25% of
worldwide market-share. It is present all over the world and in Brazil since 1997, and the product
of the acquisition of a local player, Polygram. The company has a specific department dedicated
to digital Media and Mobile services. Universal Music is able to work both in B2c and B2b. The
company offers Music both in Infotainment (full tracks) and Customization (Real tones) both
through its own channels and through all the Telcos and the integrators Acotel and Compera
nTime. Moreover, Universal intends to make the Mobile Content available through the artists’
own channels as well. Of all the digital sales revenues, about 90% come from the Mobile channel.
The company has offices in São Paulo and Rio de Janeiro, and 100 employees, seven of whom are
dedicated to digital media.
Wapja
Wapja.net is a Brazilian developer founded in 2007. It is specialized in M-Web Development
and Publishing, Mobile Marketing, and Mobile Content. The company is the product of a
joint venture between the Internet Agency Castwork.com and the Mobile Content developer
Urubu.info. The enterprise works in the B2c segment offering mainly Infotainment through
the M-Portal Obba.mobi. They also offer free Customization content through download using a
Mobile Advertisement-based model. Regarding the B2b operations, the company acts as Mobile
internet agency in the areas of M-Site development, Mobile Services (CRM management), Mobile
Marketing & Advertising and Mobile Media solution. In 2008, its M-Site received on average
3,000 users per month.
Zero9
Zero9 is a Mcsp founded in 2001 and focused on the creation, management, promotion and
distribution of interactive content and services for mobile phone users. Zero9 since beginning of
2008 is majority owned by Invest Industrial, a private equity firm. Zero9 has three main areas
of expertise: mobile community, providing virtual platforms for chat, dating, messaging and
microblogging; interactive mobile content, such as ringtones, videos, games and graphics, sold
directly to consumers or in partnership with media companies and carriers; mobile marketing
unit, offering mobile marketing and advertisement services for companies in both the SMS and
WAP space. In the Brazilian market Zero9 is active in the B2C space, in both the mobile community
and the interactive mobile content. Zero9 CLUB KdVc Community is a popular social network
in Brazil with 1.5 million users. The company also provides in Brazil Games, Infotainment and
Customization offered through weekly Subscription services. Zero9 has relationships with all
Brazilian Telcos either directly or through some aggregators. With ten full-time employees, the
Brazilian operations were the fastest growing division within Zero9 in 2008.

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3. Mobile Tv and Video Infotainment
Services
Given the recent launch of 3G networks, Mobile Tv and Video services (13%) have been
strongly favored by suppliers, particularly Telcos wishing to showcase the capabilities of
the new technology and Mcsps trying to take advantage of the novelty effect.
In the meantime, Media companies and Web Editors positioned themselves as con-
tent providers, which may explain the observed high quality standards of the Brazilian
Mobile Tv and Video content. In fact, most of the Mobile Tv and Video services (52%)
are offered by Telcos, followed by Mcsps (22%), Traditional Publishers (mostly Media
companies, 18%), and Web Editors (8%).
Figure 3.1
Video services by
type of supplier
Figure 3.2
Types of
Infotainment
Mobile Tv and Video
services
Base: 476 services
Telco
Pure Player
52%
22%
18%
Web Editor 8%
Base: 476 services
On Demand
Spot
On Demand
Continuative
58%
29%
Scheduled
Continuative
13%
Further insight about the dynamics for this kind of content can be gained by analyzing
its two components: Mobile Tv (e.g., a scheduled programming continually offered) and
Video On Demand (either Continuative or Spot). While Mobile Tv accounts for only 13%
of the segment offering, Video On Demand is much more prevalent: 29% of the segment
offering is Continuative Video On Demand, and 58% is Spot Video On Demand.
Telcos are the most active suppliers overall, but excel in Continual Video On Demand
(82% of the services), a segment where Mcsps are also active (10%) while Web Editors
and Traditional Publishers lag behind (4% each).
The supply in the main segment of Spot Video On Demand is much more fragmented.
Telcos are the main suppliers (37% of the services), but the Mcsps (30%), Traditional
Publishers (21%) and Web Editors (12%) are also very representative. Finally, Telcos are
the principal suppliers also in the Mobile Tv segment (54%), but Traditional Publishers
are also very prolific (33%), with Mcsps (10%) and Web Editors (3%) restricted to experi-
mental offerings.

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28
Mobile Tv and Video Infotainment ServicesCapitolo 3
Although revenues from this type of content are still modest – especially for the
Traditional Publishers, Web Editors and Mcsps, who do not earn revenues with data
traffic – interviewed key players indicated high expectations for the medium term.
Adult/Sex services represent a notable exception for the current trend of low revenues
for Mobile Tv and Video content.
In numerical terms, the supply of Adult/Sex services is substantial (24% of all Mobile Tv
and Video services), with Web Editors levering on already consolidated brands from the
Internet environment. However, revenues can be even more considerable. Indeed, a few
Web Editors and Mcsps indicated that Adult/Sex services are responsible for more than
50% of their overall Mobile Content revenue. This has pushed some players to create spe-
cific Adult/Sex brands detached from their main supply, in order to concentrate marketing
efforts and promote better management. Other numerous Mobile Tv and Video services
types are Free Time (19%) and Sports (16%).
In terms of technology, two thirds of the Mobile Tv and Video supply use the Download
technological platform, while 29% rely on Streaming and 5% use the Brazilian Digital Tv
broadcasting system.
1
The Brazilian Digital
Tv system requires that
regular digital Tv signal
must be automatically
and freely broadcasted
also to Mobile
devices without Telco
mediation.
The high incidence of Streaming-based services can be explained by Telco’s efforts dur-
ing 2008 to offer multimedia-rich content in support of the 3G networks just rolled out.
Indeed, 93% of all Streaming-based Mobile Tv and Video services is offered by Telcos.
Figure 3.3
Infotainment
Mobile Tv and Video
services by type of
content
Figure 3.4
Infotainment
Mobile Tv and Video
services by type of
content
Other
Videoclip
Religion
News
Glamour, Fashion
& Gossip
Music
Humor
0 5 10
Nature
Cinema & Tv
15 20 25 30
Children
Base: 476 services
24%
3%
16%
19%
11%
5%
5%
4%
3%
4%
3%
1%
2%
Adult/Sex
Free Time
Sport
Base: 476 services
SBTVD
Download
5%
66%
Streaming 29%

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29
Mobile Tv and Video Infotainment Services Capitolo 3
Moreover, to further promote Mobile Tv and Video content, Telcos are experimenting
with areas inside their M-Portals where data transmission costs are reduced or even
free.
The 5% SBDTV services represent the number of Digital Tv channels available at the
time of the research1
. This supply tends to grow, as more analogue Tv channels change to
the digital format. In fact, the envisaged future scenario for this technological solution is
bleak. It is not clear how Mobile players can generate a value proposition in this model,
since data transmission is essentially free and content production and packaging is en-
tirely controlled by Media companies. On the other hand, Media companies currently
do not seem eager to offer content specifically produced or adapted to Mobile devices.
Finally, Device Manufacturers and Telcos are not promoting the technology: up to now,
there are only two device models in the market capable of receiving the SBTDV signal.
1
The Brazilian Digital
Tv system requires that
regular digital Tv signal
must be automatically
and freely broadcasted
also to Mobile
devices without Telco
mediation.

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31
4. Music and Audio Infotainment
Services
Similarly to Mobile Tv and Video services, Music and Audio segment received a great
deal of attention in 2008, especially from Telcos. Even so, in numerical terms Music and
Audio supply is small: 3% of the overall services, 4% of them being Mobile Music (full
tracks) and 96% Mobile Audio (audio podcasts and other Infotainment formats).
Fulltrack retailing followed in the steps of pioneer initiatives dating back to 2007 (such
as TIM Music Store), and was generally aligned with the launch of 3G networks. The
offering is complete, lead by Telcos, who considered the segment as strategic. In fact,
Telcos have licensing and retailing agreements with all major global music labels, and
many national and regional too. Moreover, music labels are investing in the diffusion of
devices with embedded music.
A major inhibition factor for the Mobile Music segment is the widespread phenomenon
of side-loading from PC to Mobile device. Although transversal to many Mobile Content
categories, this issue is particularly critical to Mobile Music, as signaled from Telcos and
major music labels altogether.
The uncertainty on how to sell and how to charge for Mobile Music may reflect the fact
that, on one hand, the Mobile Music market has still not found the most adequate value
proposition for the user and, on the other hand, that the players involved have not found
the right approach to cope with the peculiarities of the Brazilian market.
Besides Fulltracks, the Music and Audio segment includes innovative Audio Podcasts
offered not only by Telcos, but also by Traditional Publishers from the radio sector.

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33
5. Other Infotainment Services
Content other than Mobile Tv and Video and Music and Audio represent 80% of all
Infotainment services. The vast majority are Text-based services, accounting for 72%
of all Infotainment offering, while Image Infotainment represents 7%. Taken together,
Mms, m-Books and Software Applications services account for less than 1% of the over-
all Infotainment supply. A few Mms-based services were found, but are mostly experi-
mental given the limited supply of Mobile devices capable of using the technology and
the high costs involved.
The larger Text-based Infotainment segment can be further analyzed according to its
two major technological dynamics: Micro-browsing based services (53%), usually free
consultation M-Sites, and Sms-based Infotainment (47% of the Text-based services), rep-
resenting mostly Sms subscription-based services.
More than numerous, Micro-browsing Infotainment services are characterized by a
general high level of editorial quality. It represents mostly free Consultation services
supplied by large Traditional Publishers and Web Editors (either responsible for 37% of
the Micro-browsing Infotainment supply), and Telcos (16%). There are also many ad-
hoc services for news coverage for special occasions (in 2008, particularly the Olympic
Games and the political elections in Brazil) that, while created and managed by Web
Editors, are placed in prominent position inside Telco’s M-Portals. A particular char-
acteristic of Micro-browsing Infotainment is the possibility of customizing the supply
according to the user’s location, allowing greater focus on regional media and brands.
IfMicro-browsingInfotainmentservicesarethemostnumerous,Sms-basedInfotainment
is widely regarded by companies interviewed as an extremely popular and profitable
product. They point out a series of advantages in combining a simple delivery technology
available to practically all devices with a service that has practical value for the consum-
er. Moreover, prices are adequate even for the majority of low-ARPU pre-paid Mobile
subscribers, and suppliers benefit from a continuous revenue stream. Furthermore, the
cost for producing informational Sms content is relatively low for Traditional Publishers
and Web Editors, as these players may adapt for the Mobile dimension content originally
produced for other media. Mcsps and Telcos also reported truly positive results in terms
of text messaging Infotainment revenues. The current and prospective value of Sms-
based Infotainment is also recognized by non-retailing Mcsp, who in the course of 2008
Figure 5.1
Other Infotainment
Micro-browsing
based services by
type of supplier
Telco
Pure Player
16%
10%
37%
Web Editor 37%

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34
Other Infotainment ServicesCapitolo 5
and early in 2009 introduced technological solutions for small companies and single
individuals to create their own text messaging subscription services. For these reasons,
Sms-based Infotainment is poised for additional growth in the near future, in spite of
the already rich supply.
Figure 5.2
Other Infotainment
Sms-based services
by type of supplier
An important driver for the Micro-browsing Infotainment segment, especially in the
early days of this technology, was the incentive given to content providers by the Telcos
in the form of revenue share agreements where the content provider benefited of a parcel
of data transmission revenues. In the near future, this type of agreement will probably
be replaced by a model based on advertisement revenue share. For this reason, important
content providers are investing decisively in strengthening their presence on M-Portals
and building up audience capable of supporting display advertisement. This trend comes
up in a moment when the whole Brazilian Mobile industry is highly enthusiastic with
the possibilities of Mobile Marketing, but in face of the structural market barriers for
wide diffusion of M-Portal and Mobile Internet navigation this remains an unproved
proposition.
Base: 982 services
Telco
Pure Player
36%
13%
and Other
29%
Web Editor 22%

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35
6. Customization Services
Customization services make up 11% of the overall analyzed supply, a lasting vestige of
the huge popularity this kind of content had in the years 2004-2006, the current enthu-
siastic proposition of recent international players and the continuous attention by the
Telcos in this segment. According to the interviewed companies, in fact, this category of
Mobile Content is among those that generate most part of revenues. A factor that may
explain this situation is the still relatively high demand, particularly in the less affluent
social classes which, motivated by increasingly popular advertisements in traditional
media and affordable prices, seem to consider Customization content as some kind of
status symbol.
In numerical terms, 17% of Customization services are unsophisticated and traditional,
use the Sms technological platform and are either sound- (Monophonic ringtones, 13%)
or Image-based (Logo/animated and Logo/picture, 2% each). Easily delivered through
the Sms technology, this is exactly the type of content expected in an environment ruled
by low-cost and simple Mobile devices. Indeed, interviewed companies indicated that
traditional services are responsible for the majority of Customization-related revenues.
Multimedia-rich content, usually delivered through the Download technology platform,
correspond to 82% of the total Customization services, which is composed by Wallpapers
(29%), Polyphonic ringtones (18%), True Tones (18%), Screensavers (14%), Themes (3%)
and Videoringtones (1%). Although numerically substantial, actual use of these services
does not seem to correspond to the offering, as the required advanced devices to use this
content are not widely diffuse. On top of that, there is also the issue of data transmis-
sion pricing that further undermines consumption through the Download technological
platform. Ringbacktones (<1%) are still incipient, almost restricted to localized experi-
ments by the Telcos.
Figure 6.1
Types of
Customization
Services
A closer qualitative look at the offering shows that ringtones generally consist of original
tracks, as rights management for covers is more complex than establishing revenue share
or licensing agreements with the major music labels. Another observed trend for ring-
tones is the establishment of licensing agreements with regional and local record labels.
In one hand, this kind of agreement allow even small retailing Mcsps, who normally do
not have enough bargaining power to set up deals with the major labels, to offer original
Polyphonic
Ringbacktone<1%
18%
Screensaver14%
Logo Animated
13%
Theme 3%
True Tone 18%
1%Videoringtone
29%Wallpaper
2% Logo/Picture
2%
Monophonic

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36
Customization ServicesCapitolo 6
Mobile Music content. On the other hand, this proposition is aligned with the diversi-
fied regional market realities existent in a large country such as Brazil. Indeed, key mar-
ket players interviewed confirmed that a significant part of revenues generated by Mobile
Music is credited to regional and local music.
However, it must be highlighted that still there is no consensus about the retailing model
for Customization services. While the single buy model is still predominant, an alterna-
tive subscription-based supply is already being rolled out, particularly by Mcsps. At the
same time, major music labels are proposing a shift in revenue sharing mechanisms,
from a product-oriented pay-per-download model to a service-oriented pay-per-sub-
scriber model.
A second observed trend worth mentioning is a movement towards the supply of bun-
dled packages mixing Customization and Infotainment content. These bundles are usu-
ally linked to a popular brand or transient event (such as a blockbuster movie, game or
hit music), follow a subscription-based pricing model and are reportedly achieving good
results in terms of revenues and customer fidelity. Although it was originally introduced
by retail Mcsps, Traditional Publishers are starting to experiment with the model as well,
tying the supply to well known media brands and popular Tv shows.
Another issue that may have to be addressed in order to promote additional consump-
tion of Customization content is that of wide diffusion of the side-loading phenomenon,
mostly from illegal sources.
Finally, we expect that 2009 will see increased investments in traditional media adver-
tisement, including nationwide Tv, for this type of content. This type of advertisement is
especially important in the context of this content typology as it is considered an efficient
way of stimulating acquisition by impulse. Until recently, with a single exception, only
few experiences have been conducted by Mcsps in this arena. On the other hand, regard-
ing the web advertisement channel, it is necessary to say that the affiliation model is not
being explored at all in the Brazilian market, contrarily to the more mature markets
where this channel is usually well developed.

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37
7. Gaming Services
Gaming services represent 5% of the overall analyzed supply. These services are almost
equally distributed regarding the delivery technological platform: Micro-browsing
(34%), Download (33%) and Sms (33%).
This balance is particularly curious, since in more mature markets there is a tendency
for a higher proportion of Download-based Games over Sms-based games. This situa-
tion may be partially explained by the already mentioned barriers for data transmission
(high costs, confusing pricing policies), Mobile Content adoption in general (large share
of low-ARPU, post-paid Mobile subscribers) and rich-content in particular (relatively
low incidence of JAVA or BREW capable devices), but a complete explanation certainly
includes the problem of widespread piracy, an issue for which interviewed companies in-
volved with Mobile Gaming demonstrated deep concern. Even so, we foresee a relevant
near future growth of Download-based Games demand as more and more JAVA-enabled
devices are rolled out accompanied by more aggressive offering in Telcos’ M-Portals.
As it was mentioned, there is a larger share of Sms-based Games in the analyzed supply
than in more mature markets. The possibility of widespread reach of text messaging in
the country is the main reason behind this. However, it must be also thoroughly high-
lighted the important role Traditional Publishers and Web Editors play as Sms-based
Games suppliers. These are usually simple, quiz-like Games linked to popular Web
brands or Tv shows, sometimes enhanced by prizes. Lately, even Mcsps started to dwell
in the Sms-based Gaming segment, achieving good results.
Similarly, also the Micro-browsing technological platform is widely used to deliver
Games, especially interactive quizzes and other Consultation-based simple Games de-
manding for minimum user input. In this case, services are usually free, and the main
aim of the supplier is to draw and build audience for the M-Portal in order to benefit
from data traffic or display advertising revenue.
Finally, it is important to mention the role of national Game developers, which are fo-
cused mainly on porting Games and developing Advergames for the emerging Mobile
Marketing environment. It is obvious that the negative impact of widespread piracy and
high development costs hinder an effective and sustainable growth scenario for this
segment.

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39
8. Communication & community
Services
Services dealing with Communication & community (C&C) content answer for 4% of
the overall analyzed supply.
A transversal view of technological platforms for C&C services show that Micro-
browsing is the predominant delivery channel, with 52% participation. Traditional Sms
is the second most popular (32%), while Mms (9%), Client-Server Applications (4%) and
Download (3%) complete the picture. No Videocall services were found, as Telcos intro-
duced this technology after the research was concluded.
Figure 8.1
Communication &
community services
by technological
platform
Figure 8.2
Types of
Communication &
community servicesBase: 157 services
Chat
Blog
50%
6%
Forum 6%
Postcard Mms 8%
Audio Community1%
Image Community 1%
Instant Messaging 4%
E-mail 9%
Social Network 11%
Video Community 2%
Anonymous Message2%
Base: 157 services
Micro-browsing
Download
52%
3%
Mms 9%
Sms 32%
Client-Server4%
The most common type of C&C service is Chat (50%), while the rest of the supply is frag-
mented between Social Network (11%), E-mail (9%), Postcard Mms (8%), Forum (6%),
Blog (6%), Instant Messaging (4%), Anonymous Message (2%), Video Communities (2%),
Audio Communities (1%) and Image Communities (1%).
Chat services are offered mainly by Telcos and Traditional Publishers, mostly using Sms
technology. On the other hand, Mcsp Chat services are mostly based on Micro-browsing
technology. While Traditional Publishers normally use their media channels to promote
their own Chat services, Mcsps concentrate mostly on M-Portal advertisement. Even
so, there is evidence that during 2009 Mcsps will strengthen Web and traditional media
promotion strategies for their C&C services.

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40
Communication & community ServicesCapitolo 8
Traditional Web services such as E-mail, Instant Messaging and Social Networks are
also quite numerous. All the main international and local Web editors (Terra, iG, UOL,
Google, Microsoft and Yahoo) are present with E-mail and Instant Messaging services,
and even one Telco is present with the direct supply of Instant Messaging. The Mobile
presence of Orkut, a highly popular Web-based social network, originated a whole
micro-environment of independent developers and a myriad of services supporting
Orkut’s Mobile use. However, Mcsps are almost absent as suppliers for this type of C&C
services.
Mms postcards are offered only by Telcos, as always pushing for multimedia-rich
(and bandwidth intensive) technological solutions, while Forums are mostly linked to
Traditional Publishers, especially magazine brands.
Still regarding the supply by supplier types, it must be highlighted the small partici-
pation of Mcsps in the C&C segment. This fact helps explain why Sms-based services,
particularly Sms-based Chat and Dating services, are not so widespread. Similarly, it
is important to underline the role of Telcos as direct suppliers of all categories of C&C
services.
The share of C&C services seems to be in line with the fact that Brazilian users associate
C&C services to the Web environment. More precisely, customer already accustomed
with free Web-based C&C display a strong reluctance to pay for these services. Moreover,
C&C interactive services need a critical mass of users in order to deliver proper value
that is somewhat hard to reach given the recurrently mentioned structural market barri-
ers for the widespread use of data services. Finally, we expect that 3G adoption will drive
demand for the most innovative C&C services, which we like to call Mobile 2.0. We fore-
see a stimulating scenario where the combined effects of increased direct participation
of large international Web companies and Mcsps, diminishing data traffic costs and a
continuous growing demand for social media may fuel a substantial growth in the C&C
segment in the next few years.

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41
9. Interaction Services
Three main types of Mobile Interaction Services are prominent in the Brazilian context:
Voting, Competition and Reverse Auction.
As mentioned in the Methodology chapter, Voting and Promotion services are in the
borderline between Mobile Content and Mobile Marketing & Services dimensions. For
this reason, these content categories were not surveyed in detail during our analysis.
Nonetheless, as initiatives in these areas involve Mobile Content, they were monitored
and brought to discussion with key industry players interviewed for this research.
Voting services are used almost exclusively by Traditional Publishers, especially Tv
broadcasters, to allow for interactivity between audience and Tv shows. Sms-based
Voting services in Brazil are considered to have had profound impact in the education of
user regarding text messaging.
The same is true for a few remarkable massive Competition initiatives requiring sub-
scription to a Sms news channel to participate in a contest for valuable prizes. A par-
ticular category of Interaction services that directly involves Mobile Content is Reverse
Auction. These services account for only 1% of the whole supply, but their revenue impact
in 2007 and 2008 was deemed impressive by companies interviewed. Reverse auction
services were consistently promoted by Traditional Publishers, especially nationwide Tv
broadcasters, and Telcos, until the second semester of 2008. At that time, following an
inquiry by the Public Ministry, Telcos suspended their reverse auction offerings, a trend
subsequently adopted also by some Traditional Publishers. Regulatory issues must be
soon clarified in order to avoid further loss of value in this important segment.

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43
10. Current Trends and Future
Scenarios
Brazil is the largest country in LATAM, and in the last decade has attained reassuring
stability from an economic and political point of view, characterized by constant and
sustainable growth of national income, reduction of income distribution disparities, and
a general improvement of social welfare.
The Mobile market in Brazil is rapidly growing, with SIM card penetration levels reach-
ing 80% in 2008. Moreover, the recent introduction of 3G networks, that has presently
achieved 1.35% penetration in the country, will certainly help to keep subscriber gains
positive in the near future. Brazilian Telcos are already aware that market saturation is
an inevitable outcome, and competition-driven decline in voice revenue is possible in
the short term. For this reason, value-added services, and particularly Mobile Content,
become strategically relevant. On the other hand, it is necessary to point out a few mar-
ket structural characteristics that may hold back the development of the Mobile Content
market. In particular we would like to highlight some of them: the prevalence of rather
low-performance devices, the high incidence of prepaid users (up to 80% of all subscrib-
ers), and a low average ARPU.
We expect four main factors to play an important role in the evolution of the Brazilian
Mobile Content market: the improvement of the technological infrastructure, the adop-
tion of transparent and affordable pricing systems for Micro-browsing, the strategic focus
on Premium and traditional Services, as well as more favourable tax and clearer regulatory
policies.
Technological Infrastructure
The Brazilian Mobile Content market is being constrained by network limitations that
have a negative impact, both on the user experience and on revenues along the value
chain. There are two principal issues that should be resolved in the short term through
more massive investments in the local technological infrastructure: the inefficiency
of MT Premium charging platforms and the technological limitations of the Micro-
browsing channel.
In the case of MT Premium charging platform, there are two elements that influence
the market in a negative way. First of all, the number of failed billing transactions is
considered very high by international standards. Although this is usually tied to user’s
lack of credit for acquiring the requested content, in many cases the credit verification
and content delivery systems are not well synchronized and up to date, which leads to
the inefficiency of the billing system. The second element has a negative impact on user
experience: due to the high number of requests for some kinds of services (especially
those advertised in primetime) the delivery systems are unable to proceed in real time,
causing delays and service failure. Such a situation is particularly harmful for the frui-
tion of Infotainment Sms-based news services whose value proposition is based on real-
time information.

Mobile Content Market in Brazil 2009 Research

Mobile Content Market in Brazil 2009 Research

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