China Mobile revolutionizes the MVNO market in Brazil

China Mobile, a global communications giant, has announced its expansion in Brazil with bold plans, revealing its intention to become a Mobile Virtual Network Operator (MVNO).

Leanne Zhang, the head of carrier business in Latin America, shared these plans during the launch of the new office in Brazil.

In this article from Guinea Mobile, we will delve into the details of this expansion, from its MVNO plans to its possible foray into the IoT market, and how these strategic decisions could change the telecommunications landscape in Brazil.

China Mobile and its empire in mobile telephony

The state-owned company China Mobile is the undisputed queen of mobile telephony, with an impressive 70% market share, 860 million customers, more than 460,000 workers, and a staggering market value of 232,000 million dollars.

This entity is not just a corporation, but a powerhouse in the telecommunications world. In 1994, the Chinese state provided telephone services through the public company known as China Telecom.

However, the rapid technological advancement of the 1990s sparked a debate among the top echelons about the best way to reorganize the public telecommunications sector to increase its efficiency.

Although the Chinese market accounts for the bulk of its business, China Mobile has also made its presence felt in other countries. In 2008, it acquired Pakistan’s leading mobile operator, Paktel, which was later renamed Zong.

In a decade, it has increased its market share in Pakistan twentyfold, which now stands around 20%.

This success offsets the failure the company experienced in 2013 in Myanmar, where, in partnership with Vodafone, it aspired to obtain a mobile operator license but ultimately both backed out, estimating that the benefits did not outweigh the investment.

Moreover, China Mobile is the largest telecommunications firm in Hong Kong, a territory where Beijing’s economic influence is increasingly apparent.

Today, with its expansion into Latin America, it is set to revolutionize a market that has been booming with MVNOs, thereby furthering its growth in the telecommunications business.

The telecommunications oligopoly in China

In 1999, with the approval of the fragmentation of China Telecom into three separate entities.

The mobile telephony branch took the name of China Mobile, while satellite activities were entrusted to China Satcom, and China Telecom retained its designation as a fixed telephony provider.

This strategic move transformed the structure of Chinese telecommunications from a monopoly to a powerful oligopoly.

With its emergence, China Mobile not only established itself as a major player in the mobile telephony domain but also participated in the creation of an oligopoly in the Chinese telecommunications sector.

This new landscape not only benefited operational efficiency but also marked the beginning of China Mobile’s unprecedented expansion.

The ambitious declaration of China Mobile

During the launch of the new offices in Latin America, Leanne Zhang surprised the audience by announcing China Mobile’s incursion as an MVNO in Brazil.

Since its entry in 2017, China Mobile has been operating IP transport services and other network services for Chinese companies in Brazil. Additionally, it has provided data, voice, and SMS for mobile roaming customers in collaboration with local operators.

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MVNO project: plans and evaluations

China Mobile, in its analysis of the local market, is considering whether the MVNO will focus on the common consumer or if it will direct its efforts to the Internet of Things (IoT) segment. The decision is pending and will depend on the evolution of the Brazilian market.

At this moment, China Mobile is in the negotiation phase to define the details of the MVNO, including the possibility of partnering with a local operator to implement this offering.

Long-term strategies and growth in Brazil Leanne Zhang emphasized China Mobile’s long-term strategic vision in Brazil, highlighting that it is not a short-term strategy. The company expects to increase its workforce from 28 employees to 45 in two years and to 80 in three years.

The uncertainty about whether China Mobile will focus on the consumer market or on IoT devices raises fundamental questions about the company’s strategic approach in the dynamic landscape of Brazilian telecommunications.

Infrastructure and future developments

In 2022, China Mobile began building its own fiber transport network, scheduled to be operational in 2024. This development will contribute to the robustness of the company’s telecommunications infrastructure in Brazil.

Furthermore, to strengthen its presence, China Mobile has plans to establish a data center in Rio de Janeiro in the same year, demonstrating its commitment to the Brazilian market.

Manufacturing of devices in Brazil

The company is considering local manufacturing of devices and modules for the Brazilian market. Leanne Zhang compares this decision to the “chicken or egg” dilemma, indicating that manufacturing will depend on the growth of the IoT business.

Earlier this year, China Mobile International announced a partnership with NLT Telecom, a Brazilian operator specializing in IoT, to implement private networks.

This collaboration will initially focus on the Internet Service Provider (ISP) market.

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Transforming the telecommunications landscape in Brazil

China Mobile is poised to make a significant mark in Brazil with its MVNO strategy and ambitious plans in the IoT market.

The choice between consumers and IoT devices, along with the potential local manufacturing of devices, defines an exciting and opportunity-filled future for the Brazilian telecommunications market.

We will stay tuned to see how these strategic decisions unfold and impact the Brazilian technological landscape.

The incursion into the MVNO market has high expectations for companies investing in this digital era, don’t miss the opportunity to contact us if you’re interested, and we will provide you with personalized advice.