Oi’s Judicial Recovery
- Creditors assembly will happen on November 10th;
- The week was intense and started with Anatel rejecting one of the main proposal of Oi’s recovery plan. The Conduct Adjustment Term in which Oi’s debts owed to Anatel would be exchanged by investments in broadband;
- Brazilian Attorney General is coordinating the elaboration of a new plan to be presented during the creditors assembly. The new plan may offer a more balanced solution between creditors and current stockholders. A provisional measure created by the Brazilian government established long-term installment for the payment of Oi's debt owed to Anatel.
- The success of the creditors assembly and the payment of Oi’s debt to Anatel would establish the basis to the entrance of new investors linke China Telecom, in the company;
- On the other hand, the negotiation with a stockholders group is still on. There’s still a big distance between what stockholders are proposing and what creditors are willing to accept;
- Oi’s ON stocks decreased 9.1% in the week and PN fell 6.6%.
Fixed Broadband 3Q17
- Fixed broadband presented net adds of 113 thousand accesses in September, totalizing 373 thousand in the quarter, less than the number registered in 3Q16 (413 thousand);
- Claro recovered market share in the quarter with net adds of 163 thousand accesses. On the other hand, Vivo (+30 thousand) and Oi (-51 thousand) lost it. Other operators’ net additions reached 231 thousand accesses and increased market share to 19.2%.
Results 3Q17: Claro,Vivo and SKY
Comparing 3Q17 with 3Q16, net revenue increased:
- +1.8% at Vivo;
- -2.5% at Claro (including Embratel and Net);
- -3.7% at SKY.
In this comparation, net revenue of:
- Mobile services raised 3.6% at Vivo and 3.5% at Claro;
- Fixed services grew 0.5% at Vivo and -3.8% at Claro.
In the quarter, EBITDA margin reached 33.8% at Vivo and 28.8% at Claro.
Pay TV via satellite (DTH) presented losses along the quarter. Sky lost 230 thousand subscribers and Claro lost 165 thousand. Vivo lost 271 thousand DTH subscribers in the last 12 months. The operator finished DTH expansion and is focused on IPTV for the clients of its FTTH network.
3Q17 Results: International Operators
Comparing 3Q17 with 3Q16, net revenue increased:
- +33.7% at Amazon;
- +23.7% at Google;
- +22.4% at Microsoft;
- -2.2% at América Móvil;
- -2.5% at Telefônica (+4.0 organic);
- -2.9% at Millicom;
- -3.0% at AT&T;
- -4.3% at Twitter;
- -7.0% at Nokia.
Analog TV Shutdown
- Analog TV final shutdown, in the city of Rio de Janeiro and in 18 cities surrounding municipalities will take place on November 22nd. The city didn’t reach the minimum level of 90% of the domiciles supplied by digital TV;
- The shutdown occurred on October 25th in the state of Espírito Santo in the following cities: Vitória, Cariacica, Fundão, Guarapari, Serra, Viana and Vila Velha.
Other Highlights
- Nextel Brasil will disable its iDEN (Radio) network on March 31st 2018;
- By the end of the year, Vivo expects to use the spectrum of 700 Mhz in 400 cities and offer 4G+ (carrier aggregation) in 96 cities;
- Google Play registered 18 billion downloads in the world in 3Q17, more than Apple (8 billion). App Store’s revenue (US$ 11 billion) was bigger than Google Play’s (US$ 6 billion).
Coming Weeks
- TIM reports results on November 7th.
- Telcomp’s seminar will be carried out in São Paulo on November 7th.
- We’re still waiting for Anatel’s report over Brazilian pay TV statistics.
Oi Judicial Recovery
- Creditors assembly, scheduled to this Monday (Oct 23rd), was postponed for 15 days to Nov 6th. The judge responsible for Oi’s judicial recovery process gave in to creditors and government pressures for an additional deadline to find a solution for Oi;
- To be successful the judicial recovery plan needs an agreement between the current stockholders and creditors (Bondholders) about the stockholding of each party in the operator and the payment of the debt to Anatel;
- Anatel’s Directing Council will be gathered on Monday to analyse Oi’s Conduct Adjustment Term;
- TPG and China Telecom continues to evaluate the possibility of investing in Oi;
- Senate president, Eunício Oliveira, plans to send again the Law Project 79, regarding fixed telephony concessions, to the Commission of Science and Technology as well as the Commission of Constitution and Justice before sending it to vote. (Source: Telesíntese);
- Oi concluded 25 thousand agreements with low debt creditors (up to R$ 50 thousand) what answers for a volume of more than R$ 410 million;
- Oi ended August with R$ 7.3 billion in cash. The figure was slightly superior to the R$ 7.2 billion from July; (Source: Judicial Administrator Report);
- Oi’s ON stocks presented drop of 9.1% in the week and PN had fall of 15.2%.
3Q17 Results: Algar, Netflix and other companies
When we compare 3Q17 with 3Q16, net revenue increased:
+30.3% at Netflix;
+4.4% at Algar;
+4.0% at SAP;
+2.5% at Verizon;
-0.4% at IBM;
-6.4% at Ericson.
AT&T/SKY and Time Warner
CADE approved the acquisition of Time Warner by AT&T, controller of Sky in Brazil with the following conditions:
- Keeping SKY and Time Warner as separated companies, including, different CNPJs;
- Time Warner must to offer all its channels to other pay TV providers;
- SKY can't refuse to broadcast content from other producers.
CADE preferred not to analyse the implications of the SeAC Law, which prevents the verticalization between who produces and distributes audiovisual content, sending the matter to Anatel's analysis. The agency also needs to approve the operation.
Other highlights
- 89.3% of the Brazilian population, that lives in 3,259 cities, have already access to 4G. TIM is the coverage leader covering 2,401 cities with 4G;
- Telecom services revenue had fall of 5% in Aug/17, in relation to Aug/16. On the other hand, TI services revenue presented growth of 8% in the same period. (Source: IBGE);
- Brazilian Ministry of Science, Technology, Innovation and Communication launched public consultation about the National Plan of Connectivity (Plano Nacional de Conectividade - PNC), which will replace the National Plan of Broadband;
- Telebrás postponed to October 31st the auction regarding the capacity of its satellite;
- Ascenty concluded the expansion of its 7th data center in Sumaré (SP);
- Italian first minister signed a decree allowing the use of golden power in Telecom Itália. It allows the veto to sale operations, merger, or alteration in company control.
Next week
- Claro and Vivo published 3Q17 earning reports;
- We’re still waiting for Anatel to report the statistics for Pay TV in June.
