In many Brazilian cities, especially outside capitals, internet access reaches users through regional operators, or competitive operators, as the Brazilian Telecommunications Agency (Anatel) calls them. They maintain internet connectivity in areas where large operators have limited presence. According to Anatel data compiled by TelComp, an association of regional internet providers, Brazil has approximately 53 million fixed broadband connections, 60% of which are provided by small and medium-sized companies.

“The market became more competitive, but regional operators continue to invest heavily in infrastructure and digital services. This combination is what ensures relevance and growth even in a more mature environment,” says Luiz Henrique Barbosa, CEO of TelComp.

The industry experienced a peak in expansion in 2021 during the pandemic, but the growth rate shows signs of stabilizing. This year, the number of new connections is expected to be well below 3.9 million as in 2024. From January to August, there were 700,000 new ones. In addition to the market’s greater maturity, following the acceleration in previous years, Mr. Barbosa also attributes the movement to the current economic scenario of high interest rates.

There are about 20,000 fixed broadband providers in Brazil, most of them small. According to TelComp estimates, about 200 are medium-sized providers, generating revenues of close to R$10 billion per year. These companies have sought to grow through service diversification and efficiency gains.

Founded in 2009 in Recife, Um Telecom emerged with the goal of bringing “high-availability networks” to providers in Brazil’s Northeast. The business grew alongside the demand for connectivity and, today, according to its CEO, Rui Gomes, it has a presence in every state in the region. The company had revenue of R$95 million last year, a 25% increase compared with 2023. Such networks offer a high degree of resilience.

“The uneven presence of large operators creates space for local companies, which can offer customized solutions and implement them quickly,” says Mr. Gomes.

Among the main projects of Um Telecom, which has 22,000 kilometers of fiber optics in operation, is the construction of the Tier III Recife 1 data center, a total investment of R$300 million, divided into three phases and supported by the Brazilian Development Bank (BNDES). The company is also investing in cloud infrastructure and digital security, areas that already account for 20% of revenue and are expected to reach 30% to 35% within three years. Overall, Um projects annual growth of 20% to 25% and total revenue between R$150 million and R$180 million by 2027.

“The future of the sector depends on diversification,” says Mr. Barbosa of TelComp. “Connectivity is the starting point, but the value lies in the ability to integrate digital services and offer security, cloud, and regional data centers.”

Rosauro Barretto, CEO of Eaí, which operates in Paraná State and has annual revenue of close to R$20 million, agrees that diversification is necessary. “We are a B2B company and we sell landline phones and cell phone chips in the MVNO operating model,” he says, referring to the mobile virtual network operator model, which lacks its own infrastructure such as towers and frequency spectrum rights, commonly leased from a traditional mobile operator (MNO).

According to Mr. Barretto, even small cities with 4,000 to 10,000 inhabitants experience intense competition among regional operators, sometimes with three or four providers. He acknowledges that Anatel aims to foster competition but believes that the new Competition Goals Plan (PGMC) would need adjustments. “The MVNO model, for example, needs to be regulated and be part of this plan, in addition to having easier access to the Telecommunication Services Universalization Fund (FUST). Regional operators must make all the necessary investments, from building a tower to a fiber optic network,” he says.

Regional operators also advocate for more effective government regulation of the use and rental of utility poles. This represents one of the largest cost impacts, especially in rural areas, where the federal government aims to expand network coverage.

One of the most complex regions, for example, is Amazonas State, where midsized provider ClickIP operates. With revenue of R$148 million in 2024, the company serves homes via fiber optics in 14 cities across the state, as well as six in neighboring Pará State. “We grew primarily in Manaus, which lacked coverage from major operators. Today, it’s our largest subscriber base,” says Neilson Reis, CEO and co-founder of the company, along with businessman Maykon Souza.

ClickIP has been diversifying its revenue sources since 2020, investing in a data center in Manaus and implementing its national fiber backbone. “We will be the only company in Amazonas with its own nationwide network. It’s a significant investment, and the return is long-term – on average, over 36 months for access and eight years for backbones,” says Mr. Reis.

The sector is experiencing an intense wave of mergers and acquisitions, he says, after a period of accelerated expansion. The focus now, he notes, is on differentiation, profitability, and efficiency. ClickIP offers a subscription service with an average ticket price of around $20. According to Mr. Reis, constant investment and increasing value delivery are necessary, without raising the monthly fee, due to the fierce competition.

Ligga Telecom, meanwhile, focuses exclusively on Paraná state and currently has 50,000 kilometers of fiber optic network installed. Fiber expansion remains essential to ensure high-speed and stable fixed-line connections, but 5G is the complementary pillar of the business. “It’s the future of mobile connectivity and serves as the foundation for solutions such as the Internet of Things [IoT], connected agribusiness, and smart cities,” says Rosangela Miqueletti, the company’s president.

According to Ms. Miqueletti, 85% of Paraná’s state schools are served by Ligga, including rural schools, indigenous communities, and remote regions, as well as 126 municipal governments. “Recently, we enabled a connection for robotic telesurgery that connected the Red Cross Hospital in Curitiba to a surgeon at Jaber Surgery Hospital in Kuwait, over 13,000 kilometers away. The data transmission, guaranteed by our network, showed a delay of just 196 milliseconds, a crucial time for the precision of the surgery.”

Ligga has also sought to diversify its portfolio, with services such as a platform with live TV, movies, series, and sports (Ligga Play), a data center, cloud backup, and private networks. In the first six months of 2025, the company had net revenue of R$314.9 million, a 12% increase compared with the first half of 2024.