Brazil - Country Commercial Guide
ICT - Information and Communications Technologies

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

Last published date: 2021-01-22

Overview  

The Brazilian Information and Communication Technology (ICT) market is expected to grow 4.9% in 2020, according to a February 2020 study prepared by the International Data Corporation (IDC). The IT sector is projected to expand at 5.8% due to acceleration of the cloud computing and software markets.  Meanwhile, the telecommunications sector is predicted to experience a modest 0.7% growth rate, driven primarily by data services.  

While the Brazilian government (GoB)  is currently scheduled to hold its 5G auction at the end of 2020, this date will almost certainly slide into 2021 due to COVID-19 and other sticking points such as possible interference with satellite TV broadcasts on the 3.5GHz band. 

The Brazilian Data Protection Law (LGPD) is scheduled to come into effect in August 2020 with punitive sanctions delayed until August 2021, providing entities time to come into compliance with the new regulations.  However, details on implementation of the law, sanctions, and the establishment of a data protection authority (DPA) are fluid due to political maneuvering. Industry specialists report that the DPA could be established before the end of 2020.  

The COVID-19 pandemic will impact investments in all sectors. IDC estimates that IT sector investments into Latin America may experience declines of more than US$ 15 billion in 2020. IT spending in the region will decrease 10% overall, from an original projection of a 7% increase—before COVID-19 in 2020— to a 4% or more decrease. 

Leading Sub-Sectors  

Artificial Intelligence (AI) 

The GoB is reviewing its National Artificial Intelligence Strategy at the federal level, and several bills governing AI have been introduced in Congress. In the AI Readiness Index, developed by Oxford Insights and the International Development Research Center, Brazil ranks 40th out of 194 countries. Another study commissioned by Microsoft from the American consultancy DuckerFrontier, reports that with the adoption of AI technology Brazil could quadruple productivity growth and increase GDP by up to 7.1% per year. 

Cybersecurity  

In early 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 breach. E-Ciber utilizes the U.S. National Institute of Standards and Technology (NIST) Cybersecurity Framework for Critical Infrastructure, among others,  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 in the establishment of 5G networks.  There is significant demand for cybersecurity solutions within all industries, which represents an opportunity for U.S. companies.  

Internet of Things (IoT) 

In 2019, Brazil launched its National IoT Strategy aimed at advancing Brazil’s IoT plan across verticals,  including smart cities, agriculture, manufacturing, and healthcare. with an expected US$ 200 billion in widespread IoT adoption by 2025 in the country. The Inter-American Development Bank report on IoT released in Oct 2019 projects that 416 million devices will be connected to the internet in Brazil by 2023.  

Public Cloud  

The public cloud segment in Brazil is expected to grow by 35% annually and reach US$ 6.5 billion by 2022. Portaria No. 9 regulates cloud computing for the federal government. According to the Ministry of Economy, federal procurement of cloud services in 2020 have an estimated value of US$ 61 million,  comprised of US$ 21.5 million in renewals of existing contracts and US$ 40 million in new contracts.  

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. Expansion of the market requires infrastructure investment and service improvements, and public investment has typically been required to service the most remote areas of Brazil.

Brazil’s auction of 5G spectrum has been delayed to 2021. In May 2020, Anatel closed Public Consultation No. 9, on the Bidding Notice for radio frequency bands that will allow the implementation of the fifth-generation (5G) technology in Brazil. This will be the largest frequency auction in Anatel’s history. The Public Notice proposes the bidding of the 700 MHz, 2.3 GHz, 3.5 GHz and 26 GHz bands and brings, as a novelty, the inclusion of another 100 MHz in the 3.5 GHz band.

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 the Brazilian Telecommunications Agency (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. This report uses exchange rate US$1.00 = R$4.00.

Resources

For additional information, including market report, trade events, contacts and the products and services that the U.S. Commercial Service can provide, please contact Commercial Specialist Patricia Marega.

During COVID-19 pandemic there was a huge fluctuation in dollar exchange rate from about 4,20 in December 2019 to 5,59 in June 2020.  The official link to Exchange rates is World Bank.

For more information please contact Patricia.Marega@trade.gov.