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Broadband

Decentralized ICT broadband distribution infrastructure

Photo by Denny Muller on Unsplash

Decentralized ICT broadband distribution infrastructure

Compare IOA
Country
Brazil
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
Market potential of 54.7 million additional users (16)
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Partnerships For the Goals (SDG 17)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Reduced Inequalities (SDG 10) Decent Work and Economic Growth (SDG 8) No Poverty (SDG 1) Gender Equality (SDG 5) Sustainable Cities and Communities (SDG 11)

Business Model Description

Direct capital investments in standalone WiFi stations in public areas, offered to users for free and sold to sponsors in exchange for advertisement space and securely captured data

Expected Impact

Broaden internet access to the base of the socioeconomic pyramid

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Brazil
Region
  • Brazil: Pará
  • Brazil: Bahia
  • Brazil: Minas Gerais
  • Brazil: Goiás
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Infrastructure

Development need
Brazil is held back by chronic underinvestment in infrastructure spending only 2.5% of GDP (2) This leads to critical structural inefficiencies: deficient existing transmission lines are responsible for a 20% energy loss (5); lack of investment in wastewater treatment is responsible for epidemics in over 1/3 of Brazilian households (6)

Policy priority
Infrastructure development is a top priority for the new administration, who has pledged to invest nearly US$ 50 billion in infrastructure in 2019 alone (vs. e.g., US$ 7 billion in 2018) (3) (4)

Gender inequalities and marginalization issues
Poor access to core infrastructure services forces women to allocate a large fraction of their available time to family chores (7)

Investment opportunities introduction
New administration's infrastructure development pledge means closer collaboration with private investors (e.g., continuity of PPI program and concessions timeline from past to current administration)

Key bottlenecks introduction
Licensing, funding for land acquisitions, capital requirements

Sub Sector

Infrastructure

Development need
Only 54% of Brazilians are connected to the Internet, in rural Brazil, 26% of citizens are connected. (8)(9)Mobile broadband costs on average 12% of income for the poorest 20% of Brazilians, well above the affordability threshold of 5% set by the UN Broadband Commission (12)

Policy priority
The digital economy is a top priority for the current administration, both as a means of improving economic productivity and expanding access to services (22)

Gender inequalities and marginalization issues
Across LMICs, women are eight per cent less likely than men to own a mobile phone, the gap widens significantly for mobile internet use: women are 20 per cent less likely than men to use the internet on a mobile phone (8)

Investment opportunities introduction
Fiscal and financial incentives directed towards the establishment of high-tech (specifically IoT) industry (27) (28)

Key bottlenecks introduction
affordability is a barrier to internet adoption for 37% of non-internet users in Brazil (13)

Industry

Engineering and Construction Services

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Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Decentralized ICT broadband distribution infrastructure

Business Model

Direct capital investments in standalone WiFi stations in public areas, offered to users for free and sold to sponsors in exchange for advertisement space and securely captured data

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Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

Market potential of 54.7 million additional users (16)

Market potential of 54.7 million additional users (16) The market potential for deploying improved connectivity could rise to 54.7 million currently unaddressed users 10 years or older nationwide; of these, 14 million have general knowledge of how to use the internet but no access to it (16)

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

20% - 25%

Rates of return in the Brazilian context have not been made public, with the model only initially deployed in June 2019

From benchmark case studies outside of Brazil, return potential depends on the component/service the investor is investing in: direct investment in WiFi hotspot infrastructure (seen in Brazil to total US$ 50-100K per location [17]) has yielded IRRs of 17-30% (19)

Return on sponsorship investment will vary dramatically by scale and nature of advertising model

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

The model has already begun deployment, including: the setup of local partnerships with telecommunications (fibre) providers and corporate sponsors; the overcoming of initial regulatory (including data protection) obstacles; and the initial construction of physical connectivity ports (17)

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Reliance on existing underlying broadband infrastructure, which if not properly maintained could cause essential technology and service to fail

Potential concerns on data privacy
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Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Only 54% of Brazilians are connected to the Internet, but in rural Brazil, 26% of citizens are connected (9)(10). Internet speed in Brazil is lower than in regional peers (1) (2)

Moreover, mobile broadband costs on average 12% of income for the poorest 20% of Brazilians, well above the affordability threshold of 5% set by the UN Broadband Commission (12)

In addition, affordability is a barrier to internet adoption for 37% of non-internet users in Brazil, the highest in the region behind Mexico and Colombia (13)

Gender & Marginalisation

Across LMICs, women are eight per cent less likely than men to own a mobile phone, the gap widens significantly for mobile internet use: women are 20 per cent less likely than men to use the internet on a mobile phone (8)

Expected Development Outcome

Broaden internet access to the base of the population pyramid Improve productivity and generate economic growth: a 10% of increase in broadband penetration could generate annual growth in GDP per capita by 0.9-1.5 percentage points (3)

Give mobile operators a channel for offloading excess data traffic from cellular networks

Improve reliability of connectivity, encouraging businesses to base operations in the country and spurring the growth of new markets (18) (in other markets, this model has garnered strong potential for positive spillover effects for the broader telecommunications sector [20])

Gender & Marginalisation

Contribute to narrowing the digital gender gap

Primary SDGs addressed

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.c.1 Proportion of population covered by a mobile network, by technology

Current Value

Proportion of population covered by at least a 2G mobile network 96.58(%) (2018) (32)

Target Value

100%

Partnerships For the Goals (SDG 17)
17 - Partnerships For the Goals

17.6.1 Fixed Internet broadband subscriptions per 100 inhabitants, by speed

Current Value

Fixed Internet broadband subscriptions per 100 inhabitants by speed: 10 MBPS: 7.76, 256KT2MBPS: 2.44, 2MT 10MBPS: 4.71, ANYS: 14.91 (2018) (32)

Target Value

N/A

Secondary SDGs addressed

10 - Reduced Inequalities
8 - Decent Work and Economic Growth
1 - No Poverty
5 - Gender Equality
11 - Sustainable Cities and Communities

Directly impacted stakeholders

People

Individuals with only incomplete or complete primary education (29% and 52% respectively vs. 80-93% individuals with at least incomplete secondary education); rural users (26% vs. 64% of urban users; and 22% have residential access to internet, vs. 64% in urban settings) (15)

Indirectly impacted stakeholders

People

The general population will benefit from having readily available Wi-Fi hotspots in cities, allowing some to save on their data plans

Outcome Risks

If expanded too quickly in structurally weak locations (i.e., with poor underlying fibre infrastructure), model could generate potential strain on the ICT grid and possibly slow down connection speeds

Expanded internet use could create 'screen addiction' or internet overuse, with public health ramifications: over 50% of Brazilian internet exhibit risk of excess in their internet consumption (21)

Impact Risks

Execution risk: expanding ICT too quickly and in structurally weak locations can generate strains on grid systems and slow down connection

Unexpected impact risk: internet overuse leading to screen addiction

External risk: reliance on underlying broadband infrastructure can disrupt ability to deliver expected impact

Impact Classification

C—Contribute to Solutions

What

WiFi stations could broaden internet access to the base of the socioeconomic pyramid, allowing them to access potentially formative contents

Risk

External factors such as reliance on underlying broadband infrastructure may disrupt the ability of this opportunity to deliver the expected impact

Impact Thesis

Broaden internet access to the base of the socioeconomic pyramid

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Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

(Decree for a national IoT plan): issued as part recent policy positions in favor of liberalizing the ICT market (23)

(National Digital Strategy): carried over from past administrations, emphasizes: a data-based economy; the expansion of connected devices; new digital business models; and enhanced digital interaction between citizens and government (24)

Financial Environment

Financial incentives: Fiscal and financial incentives in the sector have been primarily directed towards the establishment of high-tech (specifically IoT) industry (27) (28)

Other incentives: BNDES has launched lending initiatives focused on broadening internet access to more rural populations (29)

Regulatory Environment

(Marco Civil, Brazil's 'Internet Bill of Rights): regulates internet and data use, covering a broad range of topics such as privacy, freedom of expression, liability of internet intermediaries and network neutrality, this is a law that can be directly enforced by judges (25)

The Ministry of Communications; ANATEL, Brazil's telecommunications regulatory body; and ANCINE: regulating agencies of telecommunications and content distribution (26)

Telecommunications services do not face specific restrictions for foreign investment (26)

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Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Local telecoms companies like Linktel and America Net, Itau

Government

City of Sao Paulo

Multilaterals

Google (providing on-site connectivity technology through its Google Station platform)

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Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map

Brazil: Pará

These states have at least a minimum established broadband backbone but significantly lag other states in terms of both download speeds and internet latency (22) Download speeds average 9,000 Kbps and internet latency averages 65 miliseconds

Brazil: Bahia

These states have at least a minimum established broadband backbone but significantly lag other states in terms of both download speeds and internet latency (22) Download speeds average 7,000 Kbps and internet latency averages 45 miliseconds

Brazil: Minas Gerais

These states have at least a minimum established broadband backbone but significantly lag other states in terms of both download speeds and internet latency (22) Download speeds average 6,500 Kbps and internet latency averages 25 miliseconds

Brazil: Goiás

These states have at least a minimum established broadband backbone but significantly lag other states in terms of both download speeds and internet latency (22) Download speeds average 7,500 Kbps and internet latency averages 35 miliseconds
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References

See what sources were used to establish the investment opportunity’s data and find resources that could be consulted to explore more.
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