Proving the Business Case for the Internet of Things

Brazil's M2M tax cut to spur smart-meter rollout, says telecoms association

Iain Morris
May 13, 2014
Telecoms industry body the GSM Association (GSMA) has applauded Brazil’s decision to lower M2M taxes, saying it will provide a major stimulus for the rollout of smart metering and other remote-monitoring services.

Brazil’s government recently said it would cut the taxes that telecoms operators must pay on SIM cards installed in M2M devices and used to support the transmission of data across cellular networks.

In the wake of that announcement, Brazil’s operators have reportedly unveiled plans to invest $6 billion in the development of M2M technology over the next four years.

The legislative changes and investment commitment are likely to provide a major spur to Brazil’s smart-grid sector by lowering the communications costs for players in the market.

“President Rouseuff’s decision to reduce this taxation is a significant move to stimulate the growth of M2M services and should be recognised by other markets as a very positive and forward-looking move,” said Tom Phillips, the chief regulatory officer for the GSMA, which lobbies on behalf of telecoms operators internationally. “M2M is a new market whose growth should be encouraged by government policies of low taxation and light-touch regulation.”

Countries like Brazil that encourage the growth of M2M services will be the first to benefit from the social, environmental and economic opportunities of this important new sector,” he added.

The new rules introduced by Brazilian authorities will reduce the so-called installation inspection tax charged when a SIM is first activated, as well as the Operation Inspection Fee that is paid annually on each active SIM.

The GSMA says the total reduction works out at about 80%.

Data gathered by the association indicates there are currently around 8.7 million M2M connections overall in Brazil.

The GSMA reckons that figure to grow exponentially following the tax cuts.
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