Brazil is known for its booming telecom market. TowerXchange tracks 73,185 towers owned in Brazil by major international towercos like SBA Communications, American Tower, Sites, Highline and IHS Towers. In addition to the big three mobile operators (TIM, Vivo and Claro) there are smaller ISPs and other telecommunication providers. But a growing source of demand for telecom tower infrastructure isn’t targeting consumers at all, but instead is targeting the country’s vast agricultural sector. One operator, Sol Internet of People, already has 100s of sites constructed providing information services to agricultural customers.
Where agritech is driving new site demand
In its mission to revolutionise connectivity in the agribusiness sector, the Brazilian start up Sol Internet of People is poised to achieve a significant milestone by the end of 2024: covering about 20 million hectares with its innovative network. This ambitious goal is underpinned by plans to deploy between 700 and 800 towers strategically across rural landscapes.
Rural rollouts often face hurdles because population densities are lower and consumer ARPUs are lower. Sol Internet of People are able to rollout their own passive telecom infrastructure and IoT network because of the substantial revenue opportunity servicing Brazil’s substantial agricultural sector. According to the OEC, in 2022 Brazil’s agricultural exports were half of Brazil’s US$341bn of exports by value.
Sol's CEO, Rodrigo Oliveira, outlined the company’s objectives during an interview with TELETIME at MWC 2024 in Barcelona, Spain. The company made substantial progress in 2023, ending the year with around 450 towers in collaboration with rural producers, resulting in mobile coverage spanning 13 million hectares, with an impressive 10 million hectares added in the preceding year alone.
Collaborating with industry leaders such as Claro and Huawei, as well as agricultural machinery giant, John Deere, Sol is addressing the pressing need for connectivity solutions among Brazil's rural communities. As part of the RZK group (which operates in sectors such as energy generation and commercialisation, agribusiness, and real estate ventures), Sol is effectively a tower operator, acknowledged Oliveira. However, in this model, rural producers provide land for tower installation at no cost, receiving not only connectivity but also value-added services in return.
In addition to bundled services, a third layer of operation involves consolidating information and insights from rural producers — a wealth of information useful for partners seeking financing from the financial market, as reported by Sol's CEO.
Beyond enhancing operational efficiency, Sol recognises the transformative impact of connectivity on the quality of life in covered regions. By facilitating productivity and access to entertainment, Sol's network is poised to bring about tangible improvements to rural communities across Brazil.
SOL Internet of People
Sol Internet of People is a Brazilian technology company focused on Telecommunications and IoT for agribusiness. Their purpose is to improve field productivity and enhance live in rural areas of Brazil through technology. They offer voice and data plans, a management platform, and report automation services. Their solutions enable real-time monitoring of farm machinery operations and provide insights on productivity and efficiency.
SOL partnered with AgriHub and closed 2023 by providing internet access to 15% of Brazil's agricultural area. With nearly three years in operation, part of the RZK Group, SOL already covers 12 million hectares and 63,000 rural properties. Recognising the challenge of accessing cutting-edge technology due to a lack of connectivity in rural areas, the group developed a business model, acting as an intermediary between telecom companies and agricultural regions.
The company announced the completion of a contract for installing 100 new telecommunication towers in agricultural areas. Their mission includes covering approximately 20 million hectares by the end of 2024, achieved through strategic deployment of 700 to 800 towers.
Can agribusiness drive new tower investment?
Connectivity is a challenge for the sustainable development of Brazilian agribusiness. Data from the Ministry of Agriculture and Livestock (2022) reveals that over 70% of rural properties in the country still remain offline, without any internet connection. This is despite the substantial contribution rural areas make to Brazil’s economic performance.
In many rural regions, the agricultural sector grapples with inadequate or non-existent telecommunications infrastructure, posing significant challenges to modernization efforts. The absence of telecom towers and fibre optic cables undermines the quality and availability of internet connectivity, impeding the transmission of crucial data vital for contemporary agricultural practices. This deficiency hampers the adoption of innovative technologies that rely on stable connectivity, hindering the sector's ability to optimise operations and increase productivity.
Moreover, the high costs associated with installing such infrastructure in remote areas exacerbate the situation, as small-scale producers often lack the financial resources to invest in necessary equipment and facilities. This financial barrier limits access to funding for telecommunications projects in rural regions and diminishes the incentive for telecommunications companies to invest in remote infrastructure due to low population density. Consequently, rural producers face substantial hurdles in harnessing the benefits of modern technology to improve agricultural outcomes and sustainably manage their operations.
In Brazil, approximately 90% of the population has 4G coverage, while only 40% of rural residents have this type of coverage. In Latin America, 46% of children between 5 and 12 years old live in unconnected regions, which even makes distance learning impossible.
By 2024 still some rural areas face technological limitations, such as the lack of 4G and 5G coverage. This hinders the full adoption of more advanced technologies like Agriculture 5.0, which relies on high-speed connectivity to operate efficiently.
In Brazil, the opportunities for towercos and operators in the agribusiness sector are significant and promising. With vast expanses of agricultural land and a growing demand for advanced technology solutions, there is a clear need for enhanced connectivity infrastructure in rural areas.
Towercos and operators can capitalise on this demand by investing in the expansion of telecommunication towers and the provision of dedicated internet services tailored to the specific needs of agribusinesses. By leveraging innovative business models and partnerships, they can play a pivotal role in bridging the digital divide in agriculture, empowering farmers with access to real-time data, IoT applications, and productivity-enhancing tools.
Currently towercos are not providing passive telecom infrastructure exclusively for agritech, but industry figures believe this should change. It remains difficult to build towers in isolated areas and maintain uptime for 24/7 agricultural use cases: towercos should be the perfect partner. At TowerXchange Meetup Americas this June Steve Roberts, CEO of Arqueiro Telecom will be running a session discussing this new opportunity. With the right strategies and investments, towercos and operators have the opportunity to drive transformative change in the agribusiness landscape, facilitating efficiency, sustainability, and growth across the sector in Brazil.