Telefonica and Vivo's Performance in 2Q11
Telefonica released its first results of 2nd quarter 2011 (2Q11) after the incorporation of Vivo by Telesp consolidating its mobile and fixed operations.
The company that resulted from this merger and its fixed and mobile operations (Telesp) is the biggest in Brazilian telecom sector. Billing R$ 12.1 billion in 2Q11 and reaching net profit of R$ 1.1 billion with EBITDA margin of 37.2%.
|Million R$||2Q11||∆2Q11/2Q10 (%)|
|Total Gross Revenue||
- Mobile Net Revenue*
- Fixed Net Revenue*
* eliminating the revenues common to both operators
Net revenue increased 6.7%, if compared with 2Q10, and the quantity of total accesses 12.2%. Cellular and broadband were the segments that responsible for this growth.
Cellular answered for 52.2% of the net revenue in 2Q11, fixed telephony 35.5%, fixed broadband 20.2% and pay TV 2.1%.
In 2Q11, Vivo repeated the good performance gotten in the previous quarters, with churn of 2.8% and growth ARPU (R$ 25.1) and MOU (119 minutes).
The operator continues expanding its 3G coverage ending the quarter covering 1,448 cities, this number is superior to other operators' together. Vivo amplified its leadership in market share of data terminals (42.5%) and increased its market share of accesses via 3G handsets to (31.2%), segment led by Claro with 40.1% of market share.
Vivo leads postpaid cellular growth after conquering 47.4% of the net adds in this segment in 2Q11.
In prepaid segment, however, Vivo isn't following TIM and Claro's growth.
Note: Oi presented negative net adds in prepaid segment in 2Q11.
By this result Vivo's prepaid market share dropped to 28.0% and the difference that separates it from Tim in this segment fell from 4.1 million in 2010 to 2.3 million in 2Q11. Kept the current trends, Vivo can be overtaken by TIM in prepaid market share in 2011.
In face of this scenario, Vivo decided to react and launched the plan "Vivo Sempre" charging R$ 0.05 by minute for on-net local and long distance calls.
The performance of fixed telephony
Telefonica continues to lose fixed telephony accesses and increasing broadband and pay TV.
In 2011, the carrier announced a plan to offer high speed broadband access (FTTH), but broadband net adds in 2011 are smaller than the ones gotten in 2010.
The approvation of PLC 116 in the second semester, eliminating cable TV restrictions, can help the operator to increase in broadband and pay TV.
You could ask:
- Will Vivo compete with other operators for the leadership in prepaid net adds?
- Will Telefonica increase its broadband net adds in the second semester?
- Will Telefonica operate fixed broadband outside the state of São Paulo?
- Will Embratel and Claro be integrated, like what happened to Telefonica and Vivo?
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