Small local broadband providers are able to serve regions where large operators have not yet arrived, and this drew the attention of Live. The operator launched a new franchise-based business model, in which entrepreneurs can create and manage a branded internet provider Earth connected by Vivo Fibra, entitled to support from a large company.
In addition to the Internet access with IP circuits and connection point with the Telefônica Brasil network, Vivo will provide all the agile processes, managerial and technical training, access to suppliers with differentiated prices and a call center. The franchisee will be responsible for building all the necessary network infrastructure, in addition to managing the operation, sales, service and installation.
The operator expects franchisees to be able to serve small cities, with a population of 20 to 50 thousand inhabitants, in addition to municipalities or peripheral neighborhoods of large urban centers. The forecast is that 1 million households will be covered by optical fiber by Terra franchises connected by Vivo Fibra by the year 2021, in addition to the 15 million foreseen by the expansion itself.
O franchisee’s minimum investment is R $ 2.5 million, with expected return for four years. The contract is for 10 years renewable and the operator estimates an Internal Rate of Return of approximately 30%. The expansion with the new business model begins on November 20, in the city of Águas Lindas de Goiás (GO), with about 80% coverage of the municipality.
Together, small internet providers are already bigger than any major operator and account for 31.5% of the market. Claro / NET has a 31.5% market share, followed by Vivo (22.2%) and Oi (17.1%).