Closing the usagegap in Brazil Key barriers to mobileinternet adoption and use February 2023 The GSMA is a global organisation unifyingthe mobile ecosystem to discover, developand deliver innovation foundational topositive business environments andsocietal change. Our vision is to unlockthe full power of connectivity so thatpeople, industry and society thrive.Representing mobile operators andorganisations across the mobile ecosystemand adjacent industries, the GSMA deliversfor its members across three broad pillars: GSMA Intelligence is the definitivesource of global mobile operator data,analysis and forecasts, and publisherof authoritative industry reports andresearch. Our data covers every operatorgroup, network and MVNO in every GSMA Intelligence is relied on by leadingoperators, vendors, regulators, financialinstitutions and third-party industryplayers, to support strategic decision- Our team of analysts and experts produceregular thought-leading research reportsacross a range of industry topics. We invite you to find out more atgsma.com. Follow the GSMA on Twitter:@GSMA www.gsmaintelligence.cominfo@gsmaintelligence.com Executive Summary 1Introduction 2State of the market 3Policy recommendations ExecutiveSummary Mobile internet connectivity has expandedacross Brazil, with penetration increasingfrom 54% in 2017 to 67% in 2022. However,that still leaves 33% of the population notconnected. This comprises a coveragegap of 8% (around 17 million people A third of the populationremains unconnectedto mobile internet The quarter of Brazil’s population whodo not use mobile internet servicesdespite living within coverage of mobilebroadband represents a key challengeto ensuring every Brazilian is connected To achieve universalconnectivity andmove to a moredigital society,Brazil’s main policypriority should be Creating incentivesfor the market todeliver as much mobilenetwork deployment asfeasible, while finding Encouragingmobile internetadoption amongthose covered by amobile broadband Tackling the coverage gap Tackling the usage gap Following significant reductions inmobile tariffs in Brazil in recent years,the key barriers for mobile internetadoption are related to handsetaffordability and a lack of digitalskills. For a significant proportion ofthe population, an internet-enableddevice is still unaffordable given Efforts are already underway toaddress the coverage gap, includingobligations attached to spectrumlicences, infrastructure sharing,enforcement obligations to convertfines into investment, regionalinitiatives (such as Fala Bahia and In remote or sparsely populatedareas, with negative returns oninvestment, public investment willlikely be required to complementprivate financing. Additional sourcesof public funding for connectivityprogrammes could come from thenational federal budgets or through To close the usage gap, taxes andsector-specific charges should bereduced to lower the affordabilitybarrier for new users. In addition,financing mechanisms and subsidies Enhancing digital skills and literacyshould be a priority – specifically,educating target segments andincreasing awareness of use casesamong potential mobile internetusers. It is recommended that Brazilmakes strategic use of resourcesfrom the Fundo de Universalização 1. Introduction Brazil’s connectivity in context Addressing the usage gap is one of themobile industry’s main priorities. To reducethe digital divide and make it easier forpeople to take advantage of the benefits of At the end of 2021, around 250 millionpeople in Latin America2were notaccessing the mobile internet3. Due toits size, Brazil accounts for more thana quarter of the region’s unconnected.This research therefore identifies the In recent years, Brazil has advanced interms of connectivity and become abenchmark reference in the region forinfrastructure deployment4– despitethe challenges of its geography and demographics. Brazil has one of the Understanding the challenges ofrealising Brazil’s digital potential Structural challenges persist that inhibitBrazil from fully exploiting its full digitalpotential. Some 8% of Brazilians still donot have mobile broadband coverage –a challenge exacerbated by bureaucraticand costly regulatory conditions forinfrastructure deployment in certain Defining connectivity Connected:those who haveused a mobile data internetsubscription (3G, 4G or 5G) inthe last three months. In this study, we consider connectivity relative to Brazil’s total population. Given thatit is unrealistic and undesirable toconnect every person, including infantsand young children, we define universalconnectivity in Brazil as 90% internet According to Anatel, 4G coveragein November 2021 reached 88% ofthe population in Brazil, with 89municipalities lacking coverage.By September 2022 (the latestfigure available from Anatel), thishad increased to 92% – with just fivemunicipalities without coverage. The Analysis of the connected populationexclud