Kiwi opens doors to NZ in Brazil

By PETER GRIFFIN

He helped to start Telecom's mobile network in the late 1980s with a handful of cell sites in Auckland but now may turn out to be "our man" in Brazil.

Brian Schicker disappeared from the local telecoms industry in the mid-90s when he departed for Brazil to help the World Bank carry out due diligence on an investor wanting to set up a mobile network there.

Since then he has filled a number of executive roles in the Brazilian mobile industry and, now a consultant, is working with New Zealand Trade and Enterprise to open the door to the burgeoning Brazilian market for Kiwi tech companies.

"In Brazil, they've jumped fixed-line straight to wireless. They use cellphones like we use email," says Schicker.

"We've got to create a model that allows [New Zealand companies] to get into the market easily."

Schicker says despite low mobile penetration in Brazil - its population is pushing 180 million but mobile subscribers number 50 million - there is huge pent-up demand for mobile applications and text message-based applications in particular, an area where some small Kiwi companies are already proving themselves.

"We haven't seen the development of applications. They're not exploiting it to the extent of New Zealanders," says Schicker, pointing out that text messaging contributes on average less than 5 per cent of a Brazilian operator's revenue.

"We're talking about a telecoms industry that's still relatively virgin."

Schicker will use his contacts in the mobile industry to try to broker deals with operators.

Already he is concentrating on a handful of application developers - Bulletin Wireless, Run The Red and DataSquirt.

Equipment makers Tait Electronics and 4RF will also work with Schicker to crack the Brazilian market, where Bulletin this year scored a major deal with the operator AngMobile.

The text messaging platform provider will generate revenue of $1 million over the next 12 months from the deal.

"With operator sales we expect revenue to quickly grow to more than $4 million. In a month we will be delivering applications to the Brazilian market," said Bulletin director, Paul Treacy.

Bulletin and several other New Zealand companies were pressing the flesh at last month's Telexpo trade show in Brazil, keen to do business.

In a country where GDP (gross domestic product) hovers around US$4000 per capita, Schicker said spending money on advanced mobile services was not a priority for the masses.

But the developing country had scale and the technology was already in place to deliver useful text-message services.

"The distribution of income in Brazil is unbelievably bad, but a niche of 5 per cent is still a hell of a lot of people," says Schicker.

"It's not a negative, it's a possibility."

Joining the powerful Brazilian conglomerate, Algar Group, in the late 90s, Schicker was tasked with setting up a mobile network in Rio de Janeiro, where he had US$500 million at his disposal to buy telecoms switches and build 500 cell sites.

Launching in a newly liberalised market in December 1998, the company signed up 300,000 customers in four weeks. On the anniversary of the launch in December 1999, the millionth subscriber signed up.

Nearly all of the sales were for pre-paid phones and the pitch was simple.

"We told them they could walk into a store and come out talking on their phone," says Schicker, who speaks fluent Portuguese and has a Brazilian wife.

For Kiwi companies contemplating the Brazilian market, the barriers to entry are low, he says.

Local manufacturers are favoured and imports taxed, but software applications did not fall into that category.

Most of the main operators are internationally owned and propped up by foreign investment, says Schicker, back in New Zealand to visit application developers and businesses such as McDonald's who are using text messaging for promotions as well as internal use.

Schicker said Brazil had little need for 3G mobile services yet.

"The market's not ready for it in Europe, let alone Brazil."

Nevertheless, his last role was with the operator Vesper, which rolled out a CDMA 1xEV-DO wireless network for providing broadband access in main centres such as Sao Paulo. It delivers data access speeds of up to 600Kbps.

Schicker has no notions of working in the New Zealand telecoms market again and says he will probably spend the next few years flitting between Wellington and his adopted homeland.