Friday, July 13, 2001

Internet User and Subscriber Forecast for Brazil

Brazil will reach 42.3 million Internet users by 2006, almost three times the expected number for year-end 2001, according a new Yankee Group Report titled "A Second Wave: The Brazilian Internet User Forecast." The Report's title refers to a second wave of Internet users going online in the Brazilian market, mainly composed of new socioeconomic strata (SES). "This wave crests higher and will bring with it millions of additional users able to access the Internet from schools, public locations, work, and sometimes even from their homes for the first time," according to Raphael Duailibi, an analyst for the Yankee Group based in São Paulo. The primary drivers for the increase of Internet usage in Brazil include:

- Household Users (CAGR 20.8%): Higher penetration of SES B and C, due to decreasing PC pricing and more affordable financing plans.

- Corporate Users (CAGR 22.8%): Higher penetration of very small and small companies and wider-spread Internet usage inside medium-sized and large businesses.

- Academic Users (CAGR 27.0%): Higher penetration in public schools, especially those located in urban areas.

"The role of Internet universalization in Brazil will depend heavily on government initiatives. Key factors will be the introduction of cheaper PCs, and the broadening of Internet access in public schools and other public locations, such as libraries, health centers, postal agencies, and community centers," says Grant Smith, program manager for the Yankee Group's Internet Strategies Latin America Planning Service.
The impact of the second wave is still to be felt, but companies must be prepared for its arrival. "While the increase of users may be good for the entire market, there is no guarantee that all companies will be able to transform more traffic into higher revenues," said Duailibi. "It becomes increasingly important for companies to rethink their market strategy in the Internet. Companies to benefit most from the growth of the market will be those prepared to understand and respond to the needs of the second-wave Brazilian Internet user," he added.