Research Notes

More than 3 million Brazilians are paying to learn Spanish and English via their mobile phone. The problem is that the Brazilian government is charging over 40% tax on that education.

There is no doubt that mobile phones can be used for a great number of applications – including education. The Brazilian mobile operator Vivo has been very successful in marketing and selling language services, enabling their customers to learn Spanish or English on their mobile phones via SMS.

Critics may claim that you cannot educate people properly in that way. But there is no doubt that these types of applications can generate interest in learning new languages and furthermore encourage participants to take the next step and enrol in a real language school where they can receive more intensive education.

Strand Consult would like to highlight five very important points to be learned regarding the current Brazilian mobile language school situation:

 1. The mobile phone can be used to offer educational programs.

 2. There is a large demand and need for learning new languages in Brazil. 3 million Brazilians from primarily the lower classes of society are sending out a big message – “we would like to learn new languages”.

 3. Mobile operators like Vivo are showing a mature corporate social responsibility by offering this type of educational service to their mobile customers.

 4. Language schools that offer more intensive courses can use this type of activity to attract new customers to their schools.

 5. It would appear that the Brazilian politicians are not in touch with what their citizens really need, or the importance of this type of activity and education for their society to move forward.

Everybody who works in the mobile industry knows and understands that the mobile telephone is an extremely versatile platform that can be used for many different applications and situations. That customers do not necessarily need to have smartphones is very obvious when you see what Vivo is doing in Brazil. The users can access their course via SMS, IVR, WAP, Apps and via the Internet. The service is totally interactive with immediate feedback to the users. The fact that 3 million Brazilians are paying 2,99 R$ a week to participate in mobile language courses on their mobile phones, shows that this market probably has a global value that is larger than even the currently bestselling smartphone apps like Angry Birds. In other words, you do not necessarily need smartphones to service the needs and demands of mobile customers.

Strand Consult has been following the value added services market for many years, so it takes a great deal to impress us. However what we are currently seeing in Brazil impresses us a great deal. Brazilian mobile operator Vivo is using a very simple application together with a business model and content partner to make an educational service available that many Brazilians really need and can benefit from. And millions of Brazilians are purchasing and using this service.

Brazil is one of the countries where Strand Consult has done a great deal of work and had many assignments through the years. Anybody who has been following the development of Brazil for the past 10 years can only be impressed by the way the country is maturing and growing in all areas, including financially.

Brazil is also a country that still faces a number of challenges. One very important challenge is improving and expanding education and another is trying to minimise the corruption which there is unfortunately still far too much of in Brazil.

An additional challenge is that the Brazilian telco market is one of the markets with the highest industry taxes in the world. Brazilian politicians do not differ between traditional telco services and telco services that the country can actually benefit from – like this mobile language service that has over 3 million Brazilian customers.

The result is that this mobile Brazilian language school hands over a large part of their turnover directly to the Brazilian tax authorities. In other words the Brazilian government is in reality taxing the education of one of the poorest segments of the Brazilian population.

In our opinion this Brazilian case shows how important it is for mobile operators, governments and educational institutions and schools to be able to create constructive partnerships to take advantage of the mobile operators’ large customer bases and boost interest for education – which is the single most important factor to any modern society.

More operators around the world – and especially the Third World countries – should launch activities similar to Vivo’s language service. They will thereby help influence and motivate populations to increase their level of education, by giving an increased number of people access to more different types of education on a simple and available platform.

For this type of activity to be successful politicians must differ between traditional telco services and value added educational services. If politicians choose to tax educational content on mobile phones, they are misusing the telco market and preventing the mobile industry from making an important contribution to help develop society in countries like Brazil.

We hope that the Brazilian politicians will re-evaluate how to tax their telco industry and especially make an effort to reduce the very high taxes that are currently being charged on helping educate the poorer segments of the Brazilian population via mobile services.

If you would like to learn more about Strand Consult’s experiences and knowledge in this area, please do not hesitate to contact us to receive more information about our mobile reports and workshops. 
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