Teleco Blog

25
10/2020

Teleco 18 years, Results 3Q20 and more

Eduardo Tude

Teleco 18 years

This is Futurecom week, when Teleco turns 18;
I would like to thank everyone who has supported us in these years, in particular the more than 60 thousand followers on Linkedin;
In these years, Teleco has evolved from an information portal to become a consulting company with an active participation in the Brazilian market and recognized as one of the best in the country in the ICT sector.

Results 3Q20

Claro Brasil mobile revenue grew 10% in 3Q20, representing 45.7% of Claro's revenue and offsetting the 5.1% drop in fixed service revenue;
5G contracts in China contributed to Ericsson's revenue growth, but Sweden's decision to block Huawei and ZTE as 5G suppliers in the country could impact these contracts in the future.

The Brazilian government signed an agreement with the US Export and Import Bank (EximBank), which guarantees a US$ 1 billion credit line for the acquisition of equipment for the implantation of 5G in the country, as long as not provided by Huawei;
China Telecom and China Mobile had 178 million 5G phones at the end of Sep/20. China Unicom does not disclose this indicator.

Oi launched its digital Marketplace for the sale of products related to connectivity such as smart home, electronics, games, cell phone, IT and connectivity;
Oi's ON shares appreciated by 3.1% in the week and PN by 1.8%.

More highlights

Júlio Semeghini left the post of Executive Secretary of the Ministry of Science, Technology and Innovation, being replaced by Major-Brigadier Leônidas de Araújo Medeiros Jr;
Carlos Baigorri was approved by the Senate to assume the position of Director of Anatel. The Senate also approved the nominees for the Directing Council of the National Personal Data Protection Authority (ANPD);
Seaborn Networks, the operator of the Seabras-1 submarine cable, has appointed Steve Orlando as its new CEO. It also announced the offer of new services using the pair of fibers it has in the cable of América Móvil (AMX-1).
Vivo's fifth FTTH network franchisee started to operate, this time in Porangatu (GO);
Angola Cables inaugurated two points of presence (POPs) in Rio de Janeiro and São Paulo, with SP in partnership with Ascenty;
The United States Department of Justice filed a lawsuit against Google for illegal and anti-competitive practices. It is a complex process that should take a long time to discuss;
Huawei launched its new Mate 40 smartphone with the Kirin 9000 chipset, Leica camera and its Harmony operating system.

Coming week

Futurecom Digital Week (October 26-30): I will coordinate a session on Big Data on October 29^th at 15:50;
Results 3Q20: Vivo in Oct. 27^th; TIM Nov. 3^rd and Oi in Nov. 12^th.

18
10/2020

5G, Oi and more

Eduardo Tude

In September 2020 the launch of 444 models of 5G devices, being 222 of which are commercially available, was officially announced. (GSA);
From those, 200 are smartphones (148 commercially available) and 118 CPEs;
3.5 GHz is the band having more announced devices (232), as it is the most used band for 5G, which should imply cheaper devices due to the worldwide volume;
In Brazil, the availability of a larger band at 3.5 GHz depends on the migration of users of satellite dishes to receive open TV to another band;
Study prepared by LCA for Conexis (ex-SindiTelebrasil) estimated the cost of migration to another frequency band in Band C at R$ 224.1 million and to Band Ku at R$ 1.8 billion;
The study considers the use of the approved filter in the interference tests for Band C, which has an average price of R$ 76 per equipment (+ R$ 120 for installation). Several suppliers are interested in providing this filter;
This week, Apple launched 4 new smartphone models (iPhone 12) all with 5G;
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Verizon, AT&T, T-Mobile US and US Cellular, among others, formed the Next G Alliance, with the goal of guiding the development of 6G and establishing North America as a global leader in this technology.

Oi held an extraordinary general meeting that approved the amendment to article 64 of the Company's Bylaws and elected the members of the Company's Board of Directors for a new term of office until the Annual General Meeting that approves the financial statements for the fiscal year ending in December 31^st, 2020;
The Court ratified the sales notices for the units of Oi's towers and data center in an auction scheduled to take place on November 26th. Digital Colony has a binding offer for towers (R$ 1.076 billion) and Piemonte Holdings for data centers (R$ 325 million);
Oi's ON shares lost 3.6% in the week and PN, 4.7%.

More Highlights

An enterview with Carlos Baigorri, nominated about 1 year ago for the Anatel's Board of Directors, and with those appointed by the government for the National Data Protection Authority (ANPD), might be held this Monday in the Senate;
The Minister of Communications presented the Bill for the privatization of postal services in the country. Anatel would be responsible for the regulation, which would be renamed as the National Communications Agency (Anacom);
Law n. 14,074/20 which recreates the Ministry of Communications was published;
The ICMS rate for pay TV in the state of São Paulo increased from 12% to 14.6%. (Decree n. 65.252/2020);
FIEMG and other entities started a movement to modernize the Antenna Law and install telecommunications infrastructure in Belo Horizonte;
Telefônica Brasil was fined by the Federal Comptroller General (CGU) by R$ 45.7 for distributing 2014 World Cup tickets to public agents;
Telefónica created a unit (Telefónica Global Solutions) integrating its global wholesale, roaming and multinational customers divisions.

Coming Weeks

Results 3Q20 registered by Claro, América Móvil and AT&T/SKY;
Futurecom Digital Week (October 26-30)

11
10/2020

Market Cap, Oi, 5G, Claro and more

Eduardo Tude

Market Cap

Telefónica (-21%) and TIM (-17%) lost market cap in the first 9 months of 2020, as happened with other operators in the world. AT&T, for example, showed a 37% drop in its market value in this period;
In América Móvil the decline was 29%, in Telefónica 70% and in Telecom Italia 45%;
Oi, in turn, doubled its market cap, driven by adjustments made to the judicial recovery plan.

Oi plans to reduce its workforce by approximately 2 thousand professionals (15% of the total) through a voluntary dismissal plan;
Oi scheduled for October 16^th the extraordinary general meeting, which had to be canceled due to lack of quorum. On the agenda the reelection of the current board members;
Oi's ON shares appreciated by 1.2% in the week and PN preferred losses of 1.3%.

Oi will deploy a 5G pilot network in the city of Brasília (DF) using the 2.1 GHz band. Huawei will be the network provider;
The Specialized Federal Prosecutor's Office approved the technical area's proposal for the 5G spectrum auction. The proposal sets the auction of 5 blocks of 80 MHz in the 3.5 GHz band and that more than 90% of the spectrum sale values are converted into coverage commitments;
TIM, Telecom InfraProject (TIP) and Inatel will jointly conduct supplier tests for OpenRAN.

Claro

Claro started to adopt Claro nxt brand for Nextel customers;
Claro started selling Claro Box TV, a streaming service for open, mandatory channels and other TV content or applications, such as Netflix. It is also possible to rent a movie or content available on the NOW VOD platform;
Anatel extended to August 31st, 2021 the deadline to initiate the operation of Claro's Star One D2 satellite.

More highlights

Telebrás and RNP signed a technical cooperation agreement to integrate their networks aiming at carrying out public telecommunications policies and development, teaching and research activities;
TIM launched a Market Place of solutions for IoT, which should gather offers for the segments of industry 4.0, agribusiness, smart cities and utilities;
91% of Brazilian internet users have already purchased some merchandise through an application or website on their smartphone. (Panorama Mobile Time / Opinion Box - Mobile commerce in Brazil);
Seaborn will make a branch to Recife on its submarine cable that connects New York to São Paulo;
AT&T will stop accepting new requests for DSL fixed broadband accesses as of October 1^st. Existing customers will be able to maintain this service or switch to fiber.

4
10/2020

Growth in August, 5G and other highlights

Eduardo Tude

Growth in August

Oi reclassified approximately 5 million cell phones from its postpaid base as prepaid. If this information is confirmed, Oi would have surpassed Claro in prepaid and reached a market share of 24.6% in this segment, behind the TIM (25.4%) which occupies the 2nd position;
On the other hand, its postpaid market share without M2M would have dropped from 12.2% in July to 6.6% in August;
Vivo led mobile and prepaid growth in August and Claro was the leader in postpaid and fixed broadband growth;

Anatel's technical area is proposing that the 5G 3.5 GHz bidding be done by dividing the band into 5 80 MHz blocks, 4 national and 1 regional;
Filter tests to mitigate the interference of the 5G signal in the reception of open TV via satellite at the frequency of 3.5 GHz were completed. One of the 10 filters tested was able to mitigate the interference within the standards defined by Anatel, considered to be quite restrictive;
TIM postponed to October the launch of its 5G DSS network;
The frequency auction for 5G in France, in the 3.4 GHz and 3.8 GHz bands, raised 2.8 billion euros, with Orange paying € 854 million for 90 MHz; SFR € 728 million per 80 MHz and Bouygues Telecom and Free Mobile (Iliad) € 602 million each for 70 MHz;
Nokia reached the mark of 100 5G contracts, 12 of which are private networks with companies;
Microsoft has launched features on its cloud platform for operators to deploy 5G. This was possible thanks to the acquisition of Metaswitch and Afirmed Networks.

More Highlights

As ações ON da Oi apresentaram perdas de 4,0% na semana e as PN de 4,4%;
Rodrigo Abreu assumed the presidency of SindiTelebrasil, which starts to adopt the name of Conexis. He replaced Luiz Alexandre Garcia who has held the position for the past five years;
Anatel has decided that the authorizations for frequencies in bands A and B may be extended until November 29th, 2028. The renewal will be costly and 90% of the amount will be converted into service commitments. A refarming of this frequency range is also planned;
The proposed regulation for the occupation of poles prepared by the technical areas of Anatel and Aneel establishes that they will be managed by an independent entity (“Explorador de Poste”), thus avoiding the disorderly occupation that exists today;
Sencinet is the name of the new company that brings together BT's operations and infrastructure in Latin America, sold to CIH Telecommunications Americas;
Another operator, Globalnet operating in the state of São Paulo, is launching its MVNO (Global Mobile). It will use Telecall as an aggregator, which in turn uses Vivo's network;
Vivo approved the conversion of all its preferred shares into common shares.

Eduardo Tude

President and partner at Teleco (consultancy company), works since 2002 as analyst of Telecom market, coordinating consulting projects, publishing weekly articles, preparing sector reports and presenting workshops.

Telecom Engineer (IME 1978) and MSc. in Telecom Engineering (INPE 81), Tude is member in the Mobile World Congress’s judging commission for the Global Mobile Awards, in Barcelona, and was also a visiting specialist professor at Unicamp.

Tude had many positions in the management of Telecommunication companies in areas like Mobile Systems (Ericsson), Optical Networks (Pegasus Telecom) and Satellites (INPE).

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Teleco 18 years, Results 3Q20 and more

5G, Oi and more

Market Cap, Oi, 5G, Claro and more

Growth in August, 5G and other highlights