Brazil - Country Commercial Guide
ICT - Information and Communications Technologies, and Telecommunication

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-23

Overview

The Brazilian Information and Communication Technology market (ICT) ranked 9th in the world in 2020 and was valued at US$ 49.5 billion.  According to a report prepared by the Brazilian Software Association (ABES), the ICT market is expected to grow 7.1% in 2021. The IT sector (hardware, software and services) is projected to expand by 11.1%.  Meanwhile, the telecommunications sector has a predicted growth of 1.9% driven by higher demand for digital services.  The corporate IT sector, which encompasses hardware, software, and services, excluding consumer products, has a projected growth rate of 9.7% for 2021.

Brazil’s 5G spectrum auction was held in October 2021 and raised approximately US$ 8.5 billion. Deployment of 5G in Brazil could have a US$ 1.2 trillion economic impact and an increase in productivity of US$ 3 trillion by 2035, according to a recent study by Nokia and Omdia. Brazil possesses a mature policy and regulatory environment for the telecom sector. The National Telecommunications Agency (ANATEL) is the primary body responsible for regulating the sector.

5G spectrum winners will be expected to meet various buildout obligations, including providing coverage to 26 capital cities and the federal district by July 2022; coverage to all municipalities with >30,000 inhabitants by 2029; 4G coverage to all towns with >600 inhabitants by 2028; deploying optical fiber network backbone or backhaul networks to municipalities with >20,000 inhabitants by 2025 and to municipalities with <20,000 inhabitants by 2026; deploying optical fiber networks covering federal highways; and deploy a private 5G secure network for exclusive use by the federal government.

According to ICT industry association Brasscom, enterprise 5G and edge computing spending are likely to rise once 5G network services are introduced. Investments in data centers increased 17% year-over-year to BRL$ 4.3 billion (US$ 850 million), demonstrating strong demand for core Internet and e-services infrastructure. Brasscom also projects 2021-2024 investment in mobile and connectivity projects of approximately US$ 86 billion.

Leading Sub-Sectors  

Artificial Intelligence (AI) 

The Brazilian Strategy for Artificial Intelligence (EBIA) was published in April 2021 and aims to contribute to the elaboration of ethical principles for the development and use of responsible AI, to promote sustained investments in AI research and development, to remove barriers to innovation in AI, to encourage Brazilian AI innovation and development in an international environment, and to promote an environment of cooperation between public and private entities and industry and research centers for the development of AI. According to another Brasscom study  AI is identified as one of the primary technologies for 2021 and could generate investments of US$ 464 million for Brazil for the same year. Chatbots are expected to continue to be the primary drivers of AI market growth.

Security  

According to ABES 2021 market report, in 2021, spending on security solutions (hardware or software) will exceed US$ 900 million in Brazil, an increase of 12.5% compared to 2020. Security solutions in the cloud are projected to grow 29% in 2021. In 2020 the Institutional Security Cabinet (GSI) instituted E-Ciber, Brazil’s National Cybersecurity Strategy, which provides guidance on cybersecurity, cyber defense, critical infrastructure, confidential information, and protection against data breaches. E-Ciber utilizes the U.S. National Institute of Standards and Technology (NIST) Cybersecurity Framework for Critical Infrastructure to provide a consistent and evolving approach to identifying and assessing cybersecurity vulnerabilities and managing risks. GSI has also issued Normative Instruction #4  which provides minimum Cybersecurity requirements that must be adopted as part of the creation of 5G networks.  There is significant demand for cybersecurity solutions within all industries, representing a particularly promising opportunity for U.S. companies.  

Edge Computing

Edge computing is infrastructure modernization aiming to achieve greater efficiency through automation, process optimization and cost reduction. According to a Brasscom study, the Edge Computing sector will experience an estimated growth of 16% per year between 2019 and 2023.

Cloud  

Cloud is a key element in IT infrastructure and spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) in public cloud is expected to reach US$ 3 billion, a 46.5% increase from 2020. The private cloud model is also growing, totaling US$ 614 million in 2021. Portaria No. 9 regulates cloud computing for the federal government. 

Opportunities  

Brazil will be among the five largest markets in the world for smartphones by 2025, with around 200 million connections. The GoB has conducted several studies to improve the ICT market and address challenges in Brazil’s adoption of its Digital Transformation Strategy. GoB development of national strategies such as the National IoT Strategy, the National Defense Strategy, the National Cybersecurity Strategy, the Digital Governance Strategy, and the National Artificial Intelligence Strategy are designed to embrace the full potential of digital technologies to improve Brazilian productivity and competitiveness. 

The growing importance of mobile telephony requires improvements in service delivery, particularly within developing countries such as Brazil where challenges and opportunities for expanding the existing infrastructure network are greater. Market expansion will require infrastructure investment and service improvements, and public investment has typically been required to service even the most remote areas of Brazil.

According to Brazilian regulations, ICT products sold and used in Brazil must have a Certificate of Conformity issued by a Designated Certification Body (OCD), indicating compliance with Brazilian regulatory requirements. This certificate must also be approved by ANATEL. The chosen OCD will examine the technical characteristics of the product and determine applicable certifications and approvals. The list of OCDs designated by ANATEL can be found here.  Brazilian law requires manufacturers of imported products to have a local representative— responsible for product supply and warranty within Brazil.

Resources

  • Brazilian Association of Software Companies – ABES
  • Brazilian Association of Information and Communication Technology Companies – Brasscom

Contact Information 

For more information, please contact the US Commercial Service Industry Specialist at Patricia.Marega@trade.gov.