In MWC Barcelona, operators and authorities discussed how to connect the quarter of Brazilian population who do not use mobile internet services despite living within broadband coverage.
21 March, 2023, Brasília: The Brazilian mobile industry has joined forces for digital inclusion. During MWC Barcelona, the GSMA, the global mobile industry association, with operators Algar, Claro, TIM and Vivo, launched the report ‘Closing the usage gap in Brazil. Key barriers to mobile internet adoption and use.’ The study was presented to the Ministry of Communications, the Federal Court of Accounts and the regulatory authority Anatel. The initiative is part of We Care, a global initiative led by the GSMA to support the mobile industry’s commitment in achieving the United Nations Sustainable Development Goals (SGDs).
“The majority of Brazilians who cannot enjoy the benefits of mobile connectivity face demand-side barriers rather than constraints linked to network reach,” says Lucas Gallitto, Head of Latin America, GSMA. “The usage gap is today the main challenge to universal access. By uniting the industry and facilitating a dialogue between the public and private sectors, We Care offers a platform to address it. With this initiative, the Brazilian industry sends a clear message: we care about connecting everyone to the mobile broadband.”
According to the report, around 25% of the Brazilian population (54 million people) live within coverage of a network but do not use mobile internet services. The study highlights three main barriers to overcome this situation:
- Affordability. In Brazil, an entry-level broadband subscription costs less than 2% of gross national income per capita, a cost aligned with the affordability targets set by the International Telecommunication Union (ITU). The cost of an internet-enabled handset, however, is 6% of monthly GDP per capita, significantly higher than the level seen for the leader countries that have the largest online populations (2.5%). The weight of this barrier is much greater for the lower income segments of the population, and calls for further collaboration to address the issue of handset affordability.
- Taxation. Brazil imposes several taxes on mobile services and handsets, including state VAT (ICMS), federal VAT (IPI), municipal services tax (ISS), PIS/COFINS, FUST and FUNTELL charges. Although tax burdens such as ICMS have been reduced in 2022, the proportion of mobile service costs that are driven by taxation in Brazil still remains among the highest globally, equating to approximately 30% of operators’ net income. Reducing these sector specific taxes result in more affordable services and handsets for end consumers.
- Digital literacy. According to an ITU survey, the percentage of people with basic ICT skills in Brazil is 21%, compared to 62% in leading countries. Considering standard ICT skills, the comparison is 12% versus 46%, while for advanced skills, the percentage in Brazil is 2% versus 8% in leading countries.
Based on the diagnosis, the mobile industry proposed to the authorities a series of public policy recommendations focusing on:
- Improve digital literacy by developing a policy impact analysis on current government programmes and an improvement plan in synergy with other digital instruments already made available by telecom companies.
- Reform the tax policy of the mobile sector, promoting a simple, transparent and symmetric system, compatible with connectivity goals and a more efficient use of the Universal Telecommunications Service Fund (FUST in Portuguese).
- Boost investment incentives through appropriate fiscal and regulatory conditions, public–private partnerships for network deployment in remote areas and the adoption of additional investment alternatives from other players in the digital ecosystem.
The report highlights a series of initiatives put in place by mobile operators in Brazil to address barriers such as digital literacy. For example, Algar’s ‘Talents of the Future‘ promotes the development of technical and behavioural skills on young people aged 15 and over. Claro, in partnership with the University of São Paulo (USP), developed ‘Campus Mobile’, a competition for university students and recent graduates focused in various study areas including Education and Smart Cities. TIM partnered with other companies to strengthen the agenda of female empowerment though the project ‘Positive Women’. Vivo’s ‘Think Big Tech’ program trains educators and students in technology-related topics.
Through the We Care campaign, the mobile industry in Brazil is looking to join forces and collaborate with the Government and authorities to achieve shared goals of connecting everyone to the opportunities offered by mobile broaband connectivity.
‘Closing the usage gap in Brazil. Key barriers to mobile internet adoption and use’ is available for download here.