High Expectations for Brazil’s Two-Way Radio Market
Friday, March 01, 2019 | Comments

Brazil is the largest country in Latin America and the fifth largest in the world with the eighth-largest global economy. The country has 210 million inhabitants spread across 5,570 cities and is divided into 26 states plus the federal district of Brasilia. Growth in two-way radio across vertical markets is expected, according to local experts.

Brazil’s telecommunications sector is regulated and supervised by the National Telecommunications Agency (ANATEL), which is responsible for approving products and authorizing radio communications networks.

Until the 1990s, Brazilian law did not allow the importation of radio communications equipment, making products expensive. After the country opened to international trade, growth of professional mobile radio (PMR) networks increased exponentially.

Between 2006 and 2008, ANATEL introduced a mandate to digitize analog PMR networks, with a 2014 deadline to replace analog networks with digital technology. However, authorized analog networks are allowed to continue operating until 2022, but the sale of pure analog terminals is banned.

These changes brought a positive movement in the market, but Brazilian companies were unprepared due to a lack of infrastructure manufacturers for towers, shelter, cables and applications. Installations were often delayed for months.

Professional knowledge from manufacturers abroad was sought. Because of high travel costs, only a few hundred professionals could keep up with new technologies. A gap between generations of these specialists exists. Brazil has great engineering colleges and technical schools throughout the country, but the market has many unfilled specialized jobs.

The Market
The largest radio communications clients are in public safety, comprised of Federal Police, Federal Highway Police, National Public Security Force, the Federal and State Penitentiary Service, 27 state military police forces, 27 civil police forces, 27 fire brigade forces, institutes of expertise, about 300 municipal guards and a few dozen traffic guards. The total number of public-safety personnel exceeds 1 million.

There are two national radio communications networks, one for the Federal Highway Police, planned to have 1,400 base stations scattered throughout the federal roads and capitals of Brazil with about 600 TETRA base stations already installed. The second national network is for the Federal Police with 120 base stations using Tetrapol technology distributed in the country’s main cities. The Military Police of São Paulo State has the largest network of terminals with 100,000 police officials using Project 25 (P25) technology.

There are another 80 major networks in government, utilities, municipal, energy, airports, oil and gas, and transportation firms, as well as thousands of other small public and private networks. Many new networks were set up for major events, such as the 2014 FIFA Soccer World Cup and the Rio de Janeiro Olympics in 2016. Most of these networks demand maintenance contracts of around US$5 million per year.

The common frequency bands used are VHF-FM 148 – 174 MHz, UHF-FM 380 – 400 MHz, with a few networks in 800 MHz. The Long Term Evolution (LTE) band is not yet authorized by ANATEL, with a small band in 700 MHz only for military purposes. The most used technologies are Digital Mobile Radio (DMR), TETRA, P25, NXDN and Tetrapol, in that order. Sales to government are regulated by federal laws, which must be followed by federal, state and municipal agencies.

Outlook for Growth
Marcio Philomeno, president of the Association of Radiocommunication Companies of Brazil (AERBRAS), said in 2018 more than 130,000 PMR terminals were sold, generating about US$520 million in revenues, not including peripherals such as towers, shelter, cables, instruments and software.

“We believe that in 2019 these numbers may increase by up to 15 percent; the market is optimistic,” said Philomeno. “We have identified increments of investments in several important areas, such as public safety, energy, transportation and others that must benefit radio communications because there are no quality services without a good communication network.”

In the energy segment, Minister of Mining and Energy Bento Albuquerque said that investments of US$480 billion in the area will be needed by 2027, with US$375 billion in the oil and gas segment. Part of these investments will be used to improve and renew telecommunications systems and infrastructure.

“The market has good projections for the oil and gas sector,” Albuquerque said during a recent meeting. “We observe an intense movement of investors, eager for new opportunities in a new business segment.”

In the “Strategic Industry Map 2018 - 2022” from CNI – National Confederation of Brazilian Industry, telecommunications is the fourth top priority.

“The digitalization of economic activity is accelerated by the increasing scope and quality of telecommunications infrastructure, and it raises the productivity of the industry and contributes to the improvement of public services in education, health and urban mobility,” the report says. “Also, technologies associated with the internet of things (IoT) might offer solutions to some of the major national problems in the areas of health, urban mobility and energy efficiency.”

According to 2018 data from Brazil’s Ministry of Science, Technology, Innovation and Communications (MSTIC), only 41 percent of Brazilian rural areas have access to cellular networks with internet through 3G and 4G services. Radio networks with modems for data collection in rural areas are beginning to appear mainly for environmental sensors to improve the quality of grain production because agribusiness is another growth area in Brazil.

The market for smart cities also leverages radio communications serving the municipal guards, traffic agents, ambulance service (SAMU) and others. Projects such as the SEG Integrated Municipal Intelligence System (SIIM), from a systems integrator in the city of São Paulo, have attracted attention.

Brazil needs more companies and industries established in the country. For foreigners who want to expand their businesses, Brazil is a strong market in which to invest. The country has a complex tax system and bureaucratic legislation, so newcomers to Brazil must hire a tax consultant. The rewards will be worth the challenges.

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Diógenes Casagrande is a radiocommunications systems consultant with 35 years of experience. His activities are focused on public safety and smart cities. Contact him at diogenes.casagrande@consultores.com.br.

Engineer Marcelo Bellatini, who has more than 20 years of experience in telecommunications sales and systems integration, collaborated on the article.



 
 
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Comments
On 3/6/19, Diogenes Oliveira Casagrande said:
Dear Mr. Leon van der Linde, Thank you for your comment. In reality the private market uses a lot of bidirectional radios, but in general, it is the restricted radiation equipment less than 0.5 watts, which needs to be homologated by the National Telecommunications Agency (ANATEL) but do not need a license for use. In general they are medium and large companies, such as hotel chains, supermarkets, etc. Those that use ANATEL licenses and have complete networks are private companies, highway managers, airport managers, energy generation, transmission and distribution, mines, etc. But the market is open to new entrepreneurs.

On 3/5/19, Leon van der Linde said:
From this article I deduct that private mobile radio or private handheld radios are not allowed. I get the feeling they don't allow private companies such as plumbers and electricians and hotels, etc., to use two-way radio. Only the government and government departments are allowed to use the radio. What a waste of productivity. They also don't use the full VHF and UHF spectrum. It is a wonder they have an economy at all.


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