Brazil’s Algar Telecom Eyes Expansion

Algar Telecom, one of Brazil’s leading ISPs, is celebrating its 70^th anniversary by looking into the future. The company already operates in 16 of the country’s 26 states and is looking to expand its coverage by bundling fiber broadband, wireless, and content services to B2B and B2C customers.

It’s no easy task. Brazil is a fiercely competitive market with 10,000 ISPs – all elbowing each other for a slice of the customer base. Currently, Algar reaches nearly 1.5 million businesses and households in a vast geographic area extending from Brazil’s northeast to the south of the country. It includes 400 cities in the states of Goiás, Mato Grosso do Sul, Minas Gerais, Rio de Janeiro, Santa Catarina, São Paulo, and the Federal District where the capital, Brasilia, is located.

Algar CEO Jean Carlos Borges says the company stands out by focusing on quality. “We have a very perfect balance between high standards in terms of technology, high standards in terms of quality services, and high standards in terms of customer experience,” he says.

Algar has been especially active with FTTH (fiber to the home), extending fiber broadband to residences, apartment buildings and businesses. “The key element is, in our opinion, the broadband,” says Borges. “The network is necessary – actually essential – but it is not sufficient.”

Broadband connectivity enables the delivery of content supporting the requirements of customers, both in the B2B and B2C space. “For example, in the B2B segment, we bring IT products and IT services together with the connectivity. So for our clients, this is a one-stop-shop solution, which is perfect for them,” Borges says.

In the retail space, Algar provides broadband service to about 40% to 50% of clients with download speeds of 600 Mbps or more. 1 Gbps service is available, and Borges says the company is working on delivering 2 Gbps service as soon as possible.

5G Synergy

Borges attributes much of Algar’s success in a highly competitive market by bundling fixed-line connectivity with wireless services. Currently, most of Algar’s customers are taking advantage of the bundles, he says.

“Nowadays, if you get one household that has the fiberoptic product and service from Algar Telecom, 60 to 70% of the time the members of that household also have mobile products and service. And the client, at the end of the day, prefers to go with us because this approach is more convenient.”

Algar has used the bundle strategy with 3G and 4G. As 5G becomes available throughout Brazil, the provider is looking to employ the same approach. Brazil’s 5G rollout started in the spring of 2022 and has expanded rapidly, with coverage now estimated at close to 50%. Algar has started offering 5G services customers.

Cooperation with Huawei

Algar has provided telephone services since the 1950s, when it operated as CTBC (Companhia Telefônica da Borda do Campo). The name Algar, adopted later, was derived from the first and last names of company founder Alexandrino Garcia. “He gave us the Al and Gar, and it became Algar Telecom,” says Borges. “We are very experienced in telecommunication in Brazil, you can believe me.”

As telecommunications evolved, Algar evolved with it by adding services and strategic partnerships. One partnership that has proven especially valuable involves Huawei. Borges says Algar was Huawei’s first partner in Brazil for wired and wireless solutions.

“Algar Telecom started its partnership with Huawei at the end of ‘90s – actually 1998 – when we bought from Huawei a C&C08 switch, which was amazing in terms of fixed-wire line products and was used for voice communications,” Borges recalls.

In 2004, Borges traveled to China to plan with Huawei the deployment of a GSM (Global System for Mobile Communications) network to replace the TDMA (Time Division Multiple Access) technology Algar had been using. It took only three months to make the switch, Borges says.

“The first plane with Huawei's equipment for the wireless network arrived here in Brazil in October of 2004. And by the end of the year, for Christmas, we started our operation with the GSM solution, which was amazing. We love it,” he says.

Algar, he says, has grown with Huawei and plans to continue on that path into the future with joint projects involving both 5G and fiber services. “We are expanding our partnership,” Borges says.

Long-term Game

Algar started deploying its broadband network in 2005. The company has built a well-designed network that takes into account the specific requirement of its clients, whether in the B2B or B2C space, Borges says.

Having spent 70 years in the telecom industry, Algar is playing a “long-term game,” he says. “We believe that we have at least 100 years ahead of us. And we're totally prepared to expand our networks and serve much more clients.”