AES Eletropaulo Telecom is the telecommunications division of AES Eletropaulo - the largest power utility company in Latin America, serving 24 municipalities in the metropolitan region of Sao Paulo state, including Sao Paulo city. The region has a population of approximately 16.5 million inhabitants, an area of 4,526 square km and concentrates Brazil's most important socioeconomic region, with 5.6 million consumers.
In the last few years, AES Eletropaulo, like other power utilities in the world, has been largely investing in their fiber optic infrastructure to provide broadband access through their power lines using BPL technology - Broadband Power Line - that permits bandwidth of up to 80 MB and internet access. Their 2,000-kilometer fiber optic network covers key neighborhoods in the city, such as Moema, Pinheiros and Cerqueira Cesar, reaching 300 buildings, or 15,000 sites today. AES Eletropaulo Telecom have no plans to be a consumer service provider. Its business model is still providing backhaul or infrastructure to carriers in the region interested in using their capillarity in terms of penetration. No specific deal with any carrier is yet announced, but Eletropaulo is already running trials with 150 end users. BPL broadband is still not regulated in Brazil, but it is expected to be regulated soon, so the company is just in time with their plans to start commercial offerings to consumers in 2009.
Broadband in Brazil and especially in the main metropolitan bulks is facing inflated expectations (see "Dataquest Insight: Consumer Broadband in Brazil 2007, Where Next?"). Other carriers such as Telefonica have also implemented their own fiber optic infrastructure in other rich pocket neighborhoods of Sao Paulo city , such as Jardins. And during 2008, the mobile operators have focused their 3G technology launch offer on mobile broadband, with most of the new connections of such technology going to broadband access.
This diversity of offers will certainly drive an increase in the bandwidth-speed usage rather than reduce prices. (see "Dataquest Insight – The Future of Residential Broadband Internet Access Speeds"). The city today has Fiber Broadband connections going up to 30 Mbps; cable packages that include voice over IP and video, reaching 12 Mbps speeds; DSL packages going up to 8Mbps; and 3G Mobile broadband offering speeds between 1 and 7 Mbps - although the 80Mbps promised by BPL as a shared speed is hard to maintain consistently.
For a large country such as Brazil, this is a positive initiative, especially once several other cities and other electric energy companies can follow the example and start these types of offers. The country has 15% penetration of consumer broadband and a lot of space to growth, mainly in the rural and non metropolitan areas. BPL broadband cases throughout the world have not succeeded in other markets. If Eletropaulo succeeds on their initiative and business models with the carriers, it will make the BPL industry extremely happy.
As a reminder that broadband needs to grow hand in hand with PC availability, see "Forecast - PC Installed Base Worldwide 2004-20012". And on the topic of suitable local content and services for broadband users that are already daily connected an average of more than 4 hours and have habits of usage similar to mature markets, see "User Survey Analysis: Consumer Usage of Broadband, Internet and VoIP, Brazil, 2008".
