Anatel turns its attention to the consumer, but could do more with regards to advertising of speeds
Anatel’s new rules on the quality of broadband and mobile services complete the provisions on QoS in the communications markets set by the Brazilian government in its decree on universalization, issued in June 2011. Based on the new rules, operators will have to ensure a minimum average connection speed; this will increase year-by-year, from 60% of the maximum speed this year to 80% in 2014.
In a country that is seeing rapid growth in the uptake of telecommunications services, the regulator is aware of the importance of protecting consumers and guaranteeing certain levels of service. Brazilian consumers will now expect consistently good broadband service wherever they are, based on any technology.
The rules passed by Anatel are very detailed. They cover many of the services provided by the operators, including consumer-friendly provisions such as the minimum performance of customer service helplines, but the most relevant part of the measures relates to the minimum performance of fixed and mobile broadband, an area of regulation less common in markets that are yet to be defined as mature.
Unlike regulators in countries such as the UK, Hong Kong, and Singapore, Anatel has not coupled the regulations on quality and minimum speeds with obligations related to the way in which broadband speeds are advertised. In those markets advertising must now generally avoid referring to maximum theoretical speeds, and must instead provide information on the typical speeds reached. This is an area in which the regulator should look to intervene, so that consumers get a better idea of the speeds and actual level of service they can expect from their provider. Anatel could either impose new rules in this area, or encourage self-regulatory initiatives from the industry.
The regulator makes an early move in a developing market
Anatel’s resolution on QoS for “multimedia communications services” (the name under which broadband services are classified in the country) includes minimum average speeds. During periods of maximum traffic (PMT), as defined in the rules, operators will have to guarantee an average connection speed that is 60% of the maximum speed contracted with the user in the first 12 month of validity of the rules (i.e. as of August 2012). This will increase to 70% in the following year, and 80% from 2014 onwards.
While Brazil is not the first country to adopt QoS regulations for fixed broadband, this is a relatively early move given that the penetration of fixed connections is relatively low. As noted in the Ovum reportConsumer Protection in Fixed Broadband: Codes of Practice and the Role of Self-regulation, measures aiming to guarantee levels of service and minimum speeds have generally been passed in countries with relatively mature penetration and uptake of fixed broadband such as France, Italy, and the UK.
However, the fixed broadband market in Brazil is growing rapidly. As Ovum’sBrazil(Country Regulation Overview)reports, all the country’s operators increased their customer bases in 2011. As of 4Q11, there were 16.5 million broadband connections in Brazil, which was a significant increase (19.5%) on the 13.8 million connections it reported in the previous year. If growth continues at this pace, fixed broadband connections are going to acquire more and more relevance in a country that is also experiencing a significant growth in mobile connectivity. End users are therefore increasingly likely to turn their attention to the performance of their fixed broadband connection.
The differences between fixed and mobile networks should have been considered by Anatel
The dominance of mobile connections in the country has led Anatel to enforce parameters for data connections over mobile networks. As of February 2012, there were 45.2 million mobile broadband connections in Brazil, almost three times the number of fixed connections. The regulator is quite right to look to ensure that a minimum QoS is guaranteed to end users in such a vast segment of the Brazilian broadband market. However, despite the differences between fixed and mobile networks, Anatel has set exactly the same parameters for the speeds to be guaranteed by mobile operators as by fixed operators.
Factors that may hinder the achievement of certain minimum speeds or the stability of the connection are harder to overcome on mobile networks, which present more significant problems related to congestion and quality of signal. This is even more relevant if we consider that operators have only recently been awarded spectrum for 4G technologies. Even the availability of more spectrum and the ability to deliver better download speeds will not remove the problems inherent to data traffic over mobile networks, and the regulator should have taken these issues into account when setting its quality standards.
By Luca Schiavoni,Associate Analyst, Regulatory Telecoms, Ovum
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