Tech Roundup: Is Telegram a threat to WhatsApp’s reign in Brazil?

. Sep 11, 2020
Tech Roundup: Is Telegram a threat to WhatsApp’s reign in Brazil? Image: Tovovan/Shutterstock

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: the escalating war between Telegram and WhatsApp; moves in the fintech sector; the push for dropping payroll taxes on ICT firms.

Telegram is stealing WhatsApp’s thunder in Brazil

Russian cloud-based messaging app Telegram used to be a “just-in-case” app for Brazilians, downloaded only when courts would temporarily block Facebook-owned WhatsApp Messenger.

However, Telegram is now the app with the fastest-growing popularity among smartphone users, according to a new poll by website Mobile Time and pollster Opinion Box.</p> <ul><li>Twelve months ago, Telegram was present only on 19 percent of&nbsp; Brazilian smartphones. Now, it has been downloaded on 35 percent of devices.</li><li>Data from market research firm <a href="">42matters</a> corroborates these findings. It places Telegram as the second most-downloaded communication app on Google Play (up two positions). It ranks in the fourth position among social-networking apps on Apple.</li></ul> <p><strong>Niche. </strong>Telegram is more popular among men, people aged between 30 and 49, and wealthier Brazilians.</p> <ul><li>Telegram is making strides among financiers, with multiple channels being used to debate marketing trends. A channel belonging to InfoMoney, a finance website belonging to brokerage firm XP, has over 130,000 members.</li><li>Unlike WhatsApp, Telegram users are not too keen on interacting with brands or making purchases through the app.</li></ul> <p><strong>Channeling attention. </strong>Telegram channels — similar to WhatsApp groups — are its most popular feature. “Limits on forwarding messages imposed by WhatsApp may be attracting users to Telegram, due to the app&#8217;s flexibility.”</p> <ul><li>Earlier this year, Whatsapp restricted forwarding messages to more than one contact, in an attempt to limit the spread of disinformation.</li></ul> <p><strong>By the way … </strong>76 percent of WhatsApp users believe the app should share personal data belonging to people who spread disinformation with authorities — something that goes against the principles of new General Data Protection Law.</p> <ul><li>Interestingly, though, one-third of respondents admit to sharing news content without verifying their authenticity.</li><li>As the November <a href="">municipal elections</a> draws closer, debates on disinformation may return to the headlines. This week, House Speaker Rodrigo Maia <a href="">said</a> a new bill on fake news spreading may be up for vote in the next month.</li></ul> <p><strong>David v. Goliath.</strong> Despite the growing popularity, Telegram is still a long way from taking WhatsApp’s pole position: 95 percent of users who downloaded both apps use the latter more frequently.</p> <ul><li>The pandemic has boosted WhatsApp&#8217;s numbers, as users engage more with video and audio calls.</li></ul> <hr class="wp-block-separator"/> <h2>Nubank sets foot on investment market through acquisition deal</h2> <p>Nubank <a href=";utm_medium=social-media&amp;utm_campaign=awareness&amp;utm_content=s&amp;plc=instabiobr&amp;lp=;dt=2020-09-11">announced</a> today the takeover of online investment platform Easynvest for an undisclosed amount. The move marks Nubank’s third acquisition in the year and its first foray in the investment arena, an effervescent market in which the bank’s competitors have already taken a sizable lead.</p> <p><strong>Why it matters. </strong>Financial markets are expanding in Brazil, which is also making competition fiercer (sometimes even among players under the same parent group).</p> <p><strong>Newcomers. </strong>Nubank is behind its competitors such as digital bank Banco Inter — which already offers brokerage services. However, Nubank seems keen on challenging the competition through “democratic and accessible investment solutions.”</p> <ul><li>With 1.5 million customers and roughly BRL 20 billion in assets under its control (AUC), Easynvest gives Nubank a strong starting point. More importantly, it increases the portfolio Nubank can offer to its nearly 30 million clients.</li><li>Still, Nubank will have to work hard to catch up with sector leader XP, which currently has 2.36 million customers and BRL 436 billion in AUC.&nbsp;</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/3713661" data-url="" aria-label=""><script src=""></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/3713704" data-url="" aria-label=""><script src=""></script></div> <p><strong>Room for all.&nbsp; </strong>Brazilians&#8217; increasing appetite for riskier investments may give Nubank a new cash cow. In Q2 2020, Banco Inter booked 762,000 active customers on its brokerage platform, a 180-percent increase in a year. Now, the segment makes up for 13 percent of Inter&#8217;s customer base.</p> <hr class="wp-block-separator"/> <h2>Brazil&#8217;s ICT sector in a tug of war with the Economy Ministry</h2> <p>In August, President Jair Bolsonaro vetoed a <a href="">bill</a> extending until December 2021 payroll tax exemptions to 17 sectors — including ICT companies. The decision sparked a major outcry from business owners, who found support in Congress. Lawmakers are expected to strike down the veto, in a push led by Senator Eduardo Gomes —&nbsp;the government&#8217;s whip in Congress.</p> <p><strong>No cash.</strong> Payroll tax exemptions lift firms&#8217; obligation to pay the equivalent of 20 percent of salaries to social security funds. Instead, companies would have to pay a single levy calculated based on their gross revenue. For the ICT sector, the rate reaches 4.5 percent.</p> <ul><li>The already cash-strapped administration says it can&#8217;t waive the around BRL 5.7 billion in revenue.</li><li>ICT companies however, claim the exemptions would help them create over 300,000 jobs over the next five years.</li></ul> <p><strong>Gold mine. </strong>The solution may be an old acquaintance of previous administrations, the Fund for Universalizing Telecommunications Services (Fust).&nbsp;</p> <ul><li>Currently, the fund&#8217;s resources (estimated at BRL 22.6 billion) are directed to financing fixed-telephony projects and is frequently used to pay for part of the public debt.</li><li>The Federal Accounts Court — a sort of audit tribunal that monitors public spending — believes that only 1.2 percent of the money has been used so far.</li><li>Earlier this week, Senate President Davi Alcolumbre <a href="">said</a> he aims to vote on a bill unlocking FUST funds to extend broadband access in public schools.</li></ul> <hr class="wp-block-separator"/> <h2>Take Note</h2> <ul><li><strong>5G. </strong>Communications Minister Fabio Faria promised that the auction of 5G frequencies in Brazil would take place in &#8220;April or May 2021.&#8221; The decision comes after the pandemic has delayed technical studies for the feasibility of 5G projects and increased the need for internet connections in the country, as we explained in our <a href="">September 11 Daily Briefing</a>.&nbsp;&nbsp;&nbsp;&nbsp;</li><li><strong>Data protection.</strong> Chile’s state-owned BancoEstado suffered the biggest ransomware attack in the country’s history this week. Roughly 15,000 computers were hijacked, prompting the closure of the bank’s 416 branches. <a href="">Local media</a> reports that the only reason why customers did not lose money was that the bank’s managers literally plugged off the servers, causing severe service disruptions all over the week. The case prompted calls for the revamping of cyber laws in Chile.&nbsp;&nbsp;</li><li><strong>Investments.</strong> Chilean startup NotCo, specialized in plant-based food, <a href="">raised</a> USD 85 million in an investment round led by Future Positive and L-Catterton. The company now aims to enjoy the advantages it has gained during the pandemic &#8211; as its only sales increased to 40 percent of overall revenue — and expand its footprint in Brazil and in the U.S.</li><li><strong>Research.</strong> Brazilian researchers <a href="">found a way</a> to produce hand sanitizers using cellulose products. The study aimed at finding replacements for carbomer 940, a thickener imported from China. They came up with three cellulose products that can provide the gel texture without harming the alcohol’s bactericidal properties; the findings are now available for the public on this <a href="">link</a>.</li><li><strong>E-learning.</strong> The lack of internet access is preventing children from getting education in Peru. According to a <a href="">special report</a> by newspaper El Comércio, 45 percent of Peruvian schoolchildren are lowering their attendance in online classes. The problem is worse in rural, remote areas, where only 5.6 percent of the population has internet access.</li><li><strong>E-gov. </strong>The Brazilian government <a href="">reached the mark</a> of 918 digital services in 20 months — 345 of them launched amid the pandemic. The digitization process has saved BRL 2 billion and helped solve 88.6 million demands per year, without the need for displacements. So far, the administration has reached 60 percent of its goal of fully digitizing its 3,700 services offered by 2022.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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