5G
The release of the 3.5 GHz frequency is advancing at an accelerated pace and is no longer a bottleneck for the deployment of 5G networks. This week Anatel announced the release of more than 78 cities and the expectation is that by June 1,610 municipalities will have this frequency available for 5G.
The deadline established in the 5G notice for operators to activate the service is, however, longer. For municipalities with more than 500 thousand inhabitants, all with the 3.5 GHz band released, the deadline is July 2025.
Thus, like what happened with 4G, the advancement of 5G coverage will be driven by competition between operators, which involves seeking leadership in covered municipalities and in 5G performance.
Opensignal's January 2023 report points to the following leaders:
- Vivo in speed (up and download) and experience with video
- Claro in experience with games and voice apps
- TIM's coverage (availability and reach).
The results for download speed obtained by all operators are good (391 Mbps at Vivo), but availability, the time the user stays connected with 5G, is still low (11.4% at TIM).
Operators must differentiate their strategies in the balance of investments between covering more cities with 5G and densifying the covered cities, improving the availability of the 5G network.
Private Networks
- The lack of 5G chipsets is holding back the rollout of 5G private networks. Current ones are still based on 3GPP Release 15. For this reason, many deployments of private networks are still 4G. Devices with 5G release 16 chipsets will start to appear in late 2023. (Leo Gergs, ABI Research)
Oi
- Shareholders Tempo Capital, Victor Adler and VIC DTVM S/A, holders of more than 1% of Oi's share capital, submitted a request to call the Company's Extraordinary General Meeting to resolve on the dismissal of Oi's Board of Directors and its reduction from 9 to 7 members.
- The Company informed that the petitioners did not provide all the necessary documents to call the Extraordinary General Meeting.
- Oi's ON shares raised 66.4% in the week and PN shares lost 35.2%. Ibovespa rose 0.2% in the week.
- Oi's ON share appreciated by 33.1% in the year and the PN lost by 6.6%.
Results 2022
Growth of net revenue:
- +12.4% at Comcast
- +12.2% at Nokia (Euros)
- +6.5% at Netflix
- +2.4% at Verizon
- -0.3% at Ericsson (US$)
- -9.9% at AT&T
1.2 billion smartphones were sold worldwide in 2022, dropping 11.4% compared to 2021. Samsung led sales with 21.4%, followed by Apple (18.7%) and Xiaomi (12.7%).
Other highlights
- Claro extended the sale offer of the cell sites acquired from Oi for another two months. The offer is available for 6 months but there were no interested buyers.
- The GSMA expects Mobile World Congress (MWC23) to attract 80 thousand visitors to Barcelona between February 27th and March 2nd. I will be there.
Coming Week
- Feb 1st: Facebook 2022 Result 2022
- Feb 2nd: Google, Amazon and Apple 2022 Results
Fiber
- Brisanet ended 2022 with 1.1 million fixed broadband accesses, 30.5% more than the previous year. It reached 6.2 million homes passed (HP) in 154 municipalities.
- Through 90 franchisees (Agility Telecom), Brisanet also provides the service to more than 216 thousand customers and reaches 1 million past homes.
- Brisanet estimates similar growth for fixed broadband accesses in 2023 and intends to invest around R$ 350 million in FTTH in 2023 and another R$ 350 million in 5G, including backbone.
- 61 mergers and acquisitions in telecommunications were carried out in Brazil, 5 less than in 2021. (KPMG)
- Neoenergia Coelba cut 200 tons of cables and telephony equipment in 2022, a volume 260% higher than in 2021.
- TIM UltraFibra is the new brand of TIM's fixed broadband offer.
5G
- By the end of 2022, 243 operators had launched 5G services worldwide. From those, 35 with standalone 5G. There were 835 commercially available 5G smartphone models. (GSA)
- This week, the GAISPI is likely to authorize the release of the 3.5 GHz spectrum in more than 78 cities that are part of the capital clusters and cities with more than 500 thousand inhabitants where the frequency has already been released.
- So far, kits for TV reception in the Ku Band have been delivered to 25 thousand families, about 1.8% of the initial forecast demand. (EAF)
- The global RAN market will face more challenges and a general slowdown over the next five years as the market transitions into the next phase of 5G after four years of cable growth. (Dell'Oro)
2022 Results 2022: Netflix
- Netflix in 4Q22 presented revenue decline of 0.9% compared to the previous quarter, despite net additions of 7.7 million subscribers.
- Netflix revenue grew 6.5% in 2022 and the number of subscribers increased 4%.
2022 Results 2022: Ericsson
- Ericsson's net revenue in US$ decreased by 0.3% in 2022, despite the fact that 4Q22 revenue includes US$ 580 million from the agreement with Apple for the use of patents. The EBITDA margin reached 10.7%.
Oi
- Oi decided to discontinue the report of future performance projections (“guidance”).
- Accordingly, the operational and financial projections and estimates previously reported, including those recently disclosed about the Blowout of discussions with creditors, should not be considered as guidance.
- Oi's ON shares increased 4.1% in the week and PN shares fell 24.76%. Ibovespa rose 1.0% in the week.
- Oi's ON share presented a loss of 24.7% in the year and the PN of 28.2%.
Anatel/MCom
- Anatel extended Algar Telecom's authorizations and use of the 800 MHz, 900 MHz and 1.8 GHz frequencies.
- Anatel released the 450 MHz band to be used in private airport networks.
- Wilson Wellisch was assigned to occupy the Broadcasting Secretariat of MCom.
- The Annual Budget Law allocated R$ 866.2 million to FUST and R$ 298 million to FUNTTEL.
Other Highlights
- Global smartphone sales dropped 17% in 4Q22 vs. 4Q21. (Canalys)
- GSMA estimates that in India, 55% of adult men owned a smartphone in 2021, while only a quarter of women did. In Brazil, this percentage is 88% for men and 90% for women (TIC Domicílios)
Coming Days
- Jan 24th: 2022 Results from AT&T and Microsoft
- Jan 25th: 2022 Results from Verizon
- Jan/26th: 2022 Result from Nokia
- 5G will continue to be the hottest topic for the sector in 2023, according to 67% of those who responded to the Teleco poll.
- Oi and Metaverso had 10% of the votes and IoT, electric poles and MVNOs will also be highlighted topics.
- The expansion of 5G networks may occur more strongly this year, with the release of 3.5 GHz in 25% of municipalities with more than 30 thousand inhabitants, including all with more than 200 thousand inhabitants.
- In the USA, however, there are indications that the phase of heavy investments in 5G is passing and operators are beginning a period of seeking return from investment. (LightReading)
ICMS
- At the end of 2022, 12 states enacted laws increasing the basic rate of the ICMS (Tax on Circulation of Goods and Services), which applies to telecom services, by approximately 2 percentage points.
Smartphones
The Panorama Mobile Time/Opinion Box on App Usage in Brazil featured the following highlights:
- 22% of the Brazilian Smartphone owners have already paid to download an App.
- Instagram (35%) WhatsApp (30%) are the Apps on which Brazilians spend the most time during the day.
- Netflix (79%) is the most used for streaming movies and series.
- Spotify (62%) for music.
- Amazon Kindle (22%) is the most used for book.
283 million used smartphones were sold worldwide in 2022, a growth of 11.5% compared to 2021. (IDC)
Oi
- Oi's ON shares lost 23.1% in the week and PN shares lost 22.6%. Ibovespa rose 1.8% in the week.
Other Highlights
- Vivo put its fiber broadband network (FTTH) into commercial operation in three cities in Pará: Altamira, Redenção and Paragominas.
- From January 25th on, mobile operators in Brazil will have to charge, for those who are in transit in Chile, the same tariffs charged internally in Brazil.
Coming Weeks
- Jan 19th: Netflix's 2022 Results
- Jan 20th: Ericsson's 2022 Results
Mobile Telephony in Nov/22
- After the loss of 6.4 million mobile accesses in Nov/22, Brazil counted 255 million cell phones again, approximately the same amount it had at the end of 2021.
- In this period, the loss of 7 million prepaid subscribers was offset by the growth of 2.6 million mobile accesses in postpaid without M2M and M2M (4.6 million).
- TIM (-5.4 million) and Claro (-1.1 million) were responsible for negative net adds in November.
- These negative net adds can be largely attributed to the disconnection of prepaid cell phones acquired from Oi Mobile.
- In Sep/22, Vivo had already disconnected about 3 million mobile accesses acquired from Oi Mobile, mostly prepaid (2.2 million). These cell phones were considered inactive, according to the criteria adopted by Vivo.
- The disconnection, however, is part of an adjustment carried out at the end of the year by the operators, in order to reduce expenses with the annual inspection fee of approximately R$ 13.40 per cell phone at the end of the year.
- From the 5.4 million disconnected mobile accesses by TIM, 1 million of them were not using area codes with customers acquired from Oi Mobile. At Claro, the approximately 1.1 million disconnected cell phones were almost entirely in these Oi Mobile area codes.
5G
- Brazil ended November with 5.1 million 5G cell phones, 2.2 million from Claro, 1.8 million from Vivo and 1.1 million from TIM.
- Claro led the growth in the month (263 thousand mobile accesses), followed by Vivo (158 thousand) and TIM (138 thousand).
Growth in Nov/22: Fixed Broadband, Fixed Telephony and Pay TV
- The number of fixed broadband accesses in Oct/22 increased from 43.7 million to 44.4 million, with growth of 7.8 thousand (+4 thousand) from providers that reported accesses in the month.
- 44 million accesses were reported in Nov/22 by 7.46 thousand providers. Among the providers that failed to report is Alares (Conexão) which operates - 234 thousand accesses compared to Oct/22.
- Vivo led the growth in the month among large providers (+24 thousand accesses) and Oi presented negative net adds (-9.6 thousand).
- Fixed Telephony net adds in Nov/22 were positive (+47 thousand), due to the growth from competitive providers (+181 thousand).
- Pay TV subscriber base also continued to shrink. The net adds of Nov/22 were negative by -68.1 thousand and -905 thousand in the accumulated of the year.
Oi
- Oi started negotiations with its creditors, with the help of Moelis & Company, aiming to improve its debt profile and proceed with its Strategic Plan.
- The company intends to raise US$ 1 billion, with its stake in V.tal estimated at about R$ 7.8 billion as guarantee.
- As part of the proposal, the creditors would convert 65% of the face value of the debt into equity of a subsidiary, contemplating the fiber assets of Oi (Client Co). Oi S.A. would retain a 70% stake in Client Co.
- In 3Q22, the face value of its debt reached R$ 35 billion, of which R$ 18.5 billion in Qualified Bonds and ECA.
- Anatel showed concern with the possibility of Oi selling its stake in V.tal and not being able to honor its commitments with the Agency.
- To support the negotiations, Oi presented a business plan in which it improves its EBITDA margin from around 10% to more than 20% from 2025 on, with the end of the fixed telephony concession, which has an impact of about R$ 2 billion per year in its operating costs (Opex).
- Oi started to offer broadband with fiber in 20 more municipalities, totaling 277 with this service.
- Cade approved the sale of 8 thousand Oi's cell sites to Highline.
- Anatel homologated Oi's Wholesale Product Reference Offer (ORPA) for Pipelines and Subducts, with the value of R$ 74.77 monthly rent per km of pipeline and box.
- Oi's ON share lost 5.9% in the week. On the other hand, PN raised 3.9%.
Fiber
- Terra Fibra, Vivo's fixed broadband franchise model, ended 2022 serving 500 thousand households (passed houses) in 30 cities, a 50% growth compared to the previous year.
- Brazil (38 Tbps) and Mexico (26 Tbps) are the main countries in Latin America in terms of international internet bandwidth. They also feature the lowest IP transit prices: US$ 0.63 to US$ 0.48 for a 10 GigE port in Mexico City or Sao Paulo. (Telegeography)
- Chile is the country with the highest average fixed broadband speed of the world in 2022 (216 Mbps), followed by China (215 Mbps), Singapore (214 Mbps), Thailand (205 Mbps), Hong Kong (194 Mbps) and United States (189 Mbps). (Okla)
Other Highlightss
- Sonia Faustino Mendes will be the executive secretary of MCom, Maximiliano Martinão the Secretary of Telecommunications and Wilson Wellisch the Secretary of Broadcasting. (Tele.Sintese)
- The governor of Goiás sanctioned the Antennas Law, the second model of the telecommunications sector, which will serve as a model to be followed by all municipalities in the state.
- MVNO Tá Telecom, formed by more than 70 providers of the “Iniciativa 5G Brasil”, which participated in the 5G auction, started to operate. It will use TIM's network.
- TIM published a new proposal for the sale of the cell sites acquired from Oi Mobile, extending the 75% discount on the amount purchased.
- Huawei's 2022 revenue was stable in comparison with the previous year despite continued US trade sanctions.
- Verizon (USA) managed to shut down its 3G CDMA network at the end of 2022, six years after announcing it.
- The Consumer Electronics Show (CES 2023) took place last weekend in Las Vegas, which highlighted games, connected cars, TVs, connected home and various gadgets.
2023 will be much better/better for the Brazilian Telecom sector than 2022 according to 64% of the readers who answered Teleco's poll. Despite of this result, this percentage is smaller than previous years. On the other hand, the percentage of those who believe 2023 will be worse/much worse than 2022 increased to 16%.
Telecom in Bovespa in 2022
Ibovespa had 4.69% gain in the year. However, shares of telecom companies presented losses in 2022:
- TIM (-5.7%)
- Telefônica Brasil (-20.4%)
- Unifique (-40.9%)
- Brisanet (-45.1%)
- Desktop (-56.4%)
- Oi PN (-60.2%)
- Oi ON (-77.6%)
In the week, Oi's shares presented loss of 10.5% in On shares and 1.9% in PN.
Other highlights
- 3.5 GHz spectrum was liberated for 5G in all the cities counting more than 500 thousand inhabitantes on January 1st.
- Federal Deputy Juscelino Filho, from União Brasil party from Maranhão, is the new Minister of Communications.
- Unifique announced the acquisition for R$ 76.9 million of ViaWebRS, a provider with 25 thousand broadband accesses (Oct/22) in 17 municipalities of the state of Rio Grande do Sul. It also acquired RASCHE & STEFENON, MB TELECOMUNICAÇÕES and SRNET, which together have 7,500 accesses, for R$ 20 million.
- UPIX Networks announced the acquisition of 76 Telecom, a provider in Mogi das Cruzes. UPIX is a global provider of connectivity services, interconnected to more than 15 countries, 100% dedicated to B2B market.
