by Justin Dove, Investment U Research
Louis Basenese, Chief Investment Strategist of Wall Street Daily, has written extensively promoting the mobile industry as a "forever growth trend."
He also recently touted the prospects for Spanish wireless giant Telefonica (NYSE: TEF). The stock has been battered recently due to Eurozone concerns along with the rest of the market.
But despite exposure to Europe, "the majority of (Telefonica's) sales – around 60 percent – don't even come from the Eurozone. They come from Latin American markets, which boast some of the strongest growth potential in the world," Basenese wrote.
And in Latin America, the economy with the most potential for mobile telecom industry growth over the next decade is Brazil…
Why Brazil's Economy is Set for Growth
At 3.5 percent, GDP growth in 2011 will be about half the rate of economic growth in 2010. But even 3.5-percent growth is better than most of the developed economies of the West. With the slowing economic growth, mobilephone subscriptions were still up 1.67 percent from July to August.
Currently the seventh-largest economy in the world according to the World Bank, there are several reasons to expect solid growth for Brazil this decade:
- Petrobras is expected to reach vast oil reserves off the coast of Brazil in the pre-salt fields. This should create jobs and export opportunities for Brazil.
- Brazil will continue to increase agricultural and mineral output, as it's abundant in natural resources – one reason China wants to gain more access to the country.
- The Açu Superport on the coast of Rio will create a "highway to China." The port is also expected to boost manufacturing along the coast and the economy as a whole.
- The 2014 World Cup and 2016 Summer Olympic Games will put Brazil front and center on the world's stage. The influx of tourists and cash flow from these worldwide events should provide another boost to the growing economy.