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Apps Opportunities in Brazil and 5G

Posted 2019-08-27

Technology in digital platforms exists to contribute and, if used wisely, can by quite profitable
In Brazil, over 60% of adults declare to have a smartphone, according to a research published in February 2019 by the Pew Research Center. And entrepreneurs bet on this scenery to create functional apps.

That the world market of apps for smartphones is expanding it’s no news. E-commerce is what boosts the growth of this trillionaire field and it is expected that apps make up to $6.3 trillion until 2012, according to App Annie, a company that analyses the mobile market.

McKinsey consultancy, on the other hand, bets that there could be an increase of $2.7 trillion in the world’s GDP until 2025, and that $69 billion would be in Brazil.
Indeed, Brazil follows this trend in the app market. A Brazilian spends, on average, over three hours a day using apps in mobile phones. With data from App Store and Google Play, it’s known that users have, on average, between 70 and 80 apps installed, however, they only use half of them, about 30 to 40.

For entrepreneurs, investors and international companies it is an excellent moment. The market growth asks for more and more intelligent and safe platforms. There are possibilities in all areas, in all professions. Uber, for example, one of the main names of this tendency, counted 600,000 drivers registered in Brazil. iFood, a leader in the market of food delivery, has approximately 120 delivery people.

Brazil walks towards a future of safe and convenient technological solutions and national and international investors already see that to venture in business via apps is essential for financial success.

Despite being recent, the app development market is a big world bet. Brazil ranks fourth in terms of online shopping apps, with a growth of 20% in two years. According to App Annie, the fourth position is behind the United States, India and China only.

Moreover, in 2017 Brazil was already the second country with the highest number of general apps in use.

With the mission of enriching even more this technology market, the government intends to auction off the 5G network frequencies to mobile internet providers.

The Brazilian National Telecommunications Agency (Agência Nacional das Telecomunicações, or simply Anatel) planned to hold a 5G auction in Brazil in March 2020, but a setback will postpone it. The fifth generation networks would use the 3,5GHz frequency, however, tests showed that it interferes with the free-to-air television signal for parabolic antennas, present in about 22 million homes in the country.

The speed of the network is the big appeal of the fifth generation and favors the creation of new app services. Much superior when compared to 4G, it should facilitate even more the consuming of streamed content, something that’s been posing a threat to pay TV for some time. Another favorable point will be the real-time content distribution apps, e-commerce, rental, service hiring, logistics, on-line games and much more.

Internet providers and pay TV in Brazil
With the biggest market share, operator Claro leads its competitors of pay TV (49%), followed by Sky, with 30% of space (but with satellite technology). Behind both is Vivo, which despite being the operator with the highest number of clients, concentrates only 8,7% of the market, and Oi, with 9,5%.

IoT, advanced services and Civil Rights Framework for the Internet
With 5G, intelligent cities and the Internet of Things are closer to people’s reality and day-to-day lives. On the other hand, as Anatel technicians evaluate, the Civil Rights Framework for the Internet (Marco Civil da Internet) should be reviewed in order for this to happen. That’s because for the communication between platforms – Internet of Things, advanced services (remote guided vehicles and telesurgery) to work properly, it will be required to privilege connections in the traffic network, which violates the net neutrality principle provided by the framework.

Besides offering thousands of facilities and artificial intelligence, it’s worth stressing that one of the main advantages that 5G will bring to the market will be the possibility of creating new business fields, apps and foster an increasingly connected society.

This new generation will embrace an increasingly broad network of connections and, therefore, it already fosters the development of new products and technologies, such as self-driving cars, delivery drones and the usage of virtual reality.

With that, new market professionals are born in the universe of technology, making international companies more competitive in the national territory.
Brazil has been preparing itself and the arrival of new foreign companies could heat up the market.

Entering the Brazilian market
With so many possibilities, the necessity of having an experienced accountancy in Brazil will be one of the most important strategies to enable control of business in the country, be it to help in the hiring or professionals, financial balances, statements, tax management or fiscal legalization.

With over 15 years in Brazil, Europartner is an accounting office with European managers with vast international experience. A team able to understand companies of diverse fields, be them small, medium or large.

To establish in Brazil is a great challenge, specifically because of the fiscal format and culture of the country. If you have doubts, send an email to our team, we’ll be more than happy to assist you.

Author's post: Europartner Accounting

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