Fixed Broadband in October
- Fixed broadband kept growing in 2017 more than in 2016. October/17’s net adds (137 thousand) were superior to October/16’s (99.5 thousand). Net adds accumulated along the year (1.6 million) are superior to 2016’s in 362 thousand accesses;
- Operators that compete with the three biggest (Claro, Vivo and Oi) are responsible for this growth, with 77% of the net adds accumulated along the year. In October the providers net adds reached 114 thousand accesses, followed by Claro (55 thousand), Vivo (-9 thousand) and Oi (-28 thousand).
Oi’s Judicial Recovery: Schroeder resigned
- Oi’s Administrative Council approved the adjustments made in in the judicial recovery plan. The new plan needs to be signed by the statutory board of the company and sent to Brazilian justice until Monday Nov. 27th;
- In this new version, capitalization may reach R$ 11 billion and the payment of fees to creditors, that participate in the capitalization, will happen in the moment of the capitalization instead of before. However, controversial points remain and they can make the approval by creditors unfeasible like the payment of fees even without capitalization, the conditions for the capital increase and the limits for dilution of the participation of the current stockholders in the company capital;
- Due to this scenario, Oi’s president Marco Schroeder resigned. He’ll be replaced by Eurico de Jesus Teles Neto, current legal director of the company;
- New York Stock Exchange (NYSE) granted an additional period of 6 months to Oi to file its Annual Report 2016 (20-F) at the American Securities and Exchange Commission (SEC);
- Oi’s ON stocks presented variation of 4. In the week and PN had variation of 1.0%.
Other highlights
- In 2016, 92.3% of the Brazilian domiciles had cell phone, 40.1% one PC with internet access and 34.5% had fixed telephone. (PNAD – IBGE);
- The auction of the 2.5 GHz frequency for small SCM providers, carried out by Anatel, didn’t produce results yet. The 90 granted companies need to start operation in 18 months will probably require the extension of this deadline. The business case to provide service with 4G isn’t robust but it may become feasible with 5G. There are still 200 companies that weren’t granted due to Anatel’s bureaucratic practices;
- Rio de Janeiro, Belo Horizonte and other 56 cities nearby these two capitals went through analog TV switch off;
- A study elaborated by Mobile Time identified 56 companies that develop chatbots in the country. These companies produced about 8 thousand bots already that change about 500 million messages by month in many channels (Facebook Messenger, websites, mobile apps, Twitter, Telegram, etc);
- On May 9th 2018, Anatel will start to block pirated cell phones in Brasília and in the state of Goiás. It will affect devices bought from February 21st 2018.
Coming weeks
- Network slicing summit 2017, online event that will happen on December 5th;
- Oi’s Creditors meeting was postponed to December 7th;
- Abinee’s annual lunch is scheduled to December 8th.
Oi’s 9M17 Results
- Oi’s net revenue in Brazil accumulated along the first nine months of the years reached 6.7%, was smaller than value registered in the sale period of 2016. The fall occurred in all the segments: residential (-2.3%), personal mobility (-2.5%) and corporative (-15.3%);
- However, in this comparation the operator improved its EBITDA margin to 27.5% and shrank its Brazilian operation loss in 11.0% to R$ 2.9 billion in 9M17. Capex increased 11.6% in 9M17/9M16 reaching R$ 3.8 billion;
- Company net debt in Sep/17 hit R$ 44.1 billion and the available cash reached R$ 7.7 billion;
- So, the company is losing revenue and clients but is improving its margin and keeping cash. Oi needs to pay its debt to get profit back, increase investments and grow.
Oi’s Judicial Recovery: Meeting was postponed again
- The judge conducing Oi’s judicial recovery process ordered the new directors, appointed by the Administrative Council (Hélio Costa and João Ribeiro), to abstain of interfering in the matters related to the judicial recovery as well as to the negotiation and elaboration of the judicial recovery plan of Oi’s companies;
- Oi’s ON stocks decreased 3.9% in the week and PN fell 3.6%.
5G
This week, I’ve been in London for the Global MBB Forum 2017, promoted by Huawei, in which CTOs of companies like Vodafone, NTT, BT, Orange, Telefônica, Telus and Bell Canada presented their view of the 5G technology. Some of my conclusions are:
- 5G will start to operate commercially in 2020. The specifications (Release 15) may be determined in 2018 and vendors need at least one year to make products available (network and smartphones);
- The main driver for 5G adoption by operator may be the brutal growth in the capacity of the new radio with Massive MIMO which will provide a reduction in bit cost;
- It isn’t clear for operators the business case for many applications that are in development to 5G. Low latency applications cost for critical systems may be an obstacle for its adoption;
- 3.5 GHz band is likely to be adopted for the beginning of 5G. During the event Huawei showed a solution that uses 3.5 GHz for download and 1.8 GHz for upload what would increase the radius of 5G cells in 3.5 GHz;
- The use of millimeter waves (above 20 GHz) is being tested for wireless fixed broad but its adoption in mobile applications will happen in the future. Millimeter waves have good performance in indoor applications but present losses when it goes from an external to internal environment.
The online event that will occur on December 5th is a good opportunity to keep updated about 5G:
Network slicing summit 2017
http://telecomwebinar.com/network-slicing-summit-2017/
3Q17’s Results
Comparing 3Q17 with 3Q16, net revenue increased:
- +5.6% at Positivo
- -4.8% at Vodafone
- -6.7% at Oi (Group)
- -12.2% at Liq (Contax)
Other highlights
- Brazil was placed in the 66th position in the UIT’s CIT Development Ranking (IDI 2017) among 176 evaluated countries;
- Emmanoel Campelo de Souza Pereira was appointed to Anatel’s council;
- Anatel approved the purchase of Nextel by AINMT (ICE Group);
- Qualcomm refused a hostile offer of US$130 billion made by Broadcom.
Coming weeks
- Network slicing summit 2017, online event that will happen on December 5th;
- Oi’s Creditors meeting was postponed to December 7th;
- Abinee’s annual lunch is scheduled to December 8th.
Oi’s Judicial Recovery: Meeting was postponed again
- Oi’s creditors meeting was postponed to December 7th and the second call to February 1st. The judge responsible for the judicial recovery process justified his decision affirming that “relevant and active creditors, who have elevated credit with recovering companies, of this recovery demonstrate it’s, at least, not advisable to hold the creditors general meeting tomorrow";
- The week was tense. Anatel decided that the new recovery plan that will be taken to the creditors meeting has to be approved by Agency first. A group of creditors filed a lawsuit with a with a request to block the appointment of Hélio Costa and João Ribeiro as new Oi’s directors;
- Brazilian Attorney General believes that, with this new deadline, it will be possible to reach a solution for Oi’s debt to Anatel;
- Meanwhile, Anatel continues to apply fines. The agency denied the request to reconsider the fines applied to Oi about the noncompliance of the fixed telephony regulation and increased the value from R$ 3.7 million to R$ 21,8 million;
- Oi’s ON stocks decreased 12.6% in the week and PN dropped 7.0%.
Law Project N. 79 and Fixed Telephony
- The Law Project number 79, which would put an end in the concession regime in fixed telephony, is still stuck in Senate. In September, fixed telephony incumbents lost 259 thousand fixed telephone accesses (-207 thousand from Oi), while CLECs gained 20 thousand.
3Q17 Results: TIM
- TIM presented a good performance in 3Q17, increasing 4.7% of net revenue in relation to 3Q16, EBITDA margin of 37.4% and net profit of R$ 279 million;
- ARPU reached R$ 20.6 and data revenue represented 60.8% of the mobile services revenue.
3Q17 Results: Nextel
- Nextel’s net revenue decreased 23.5% in comparison with 3Q16. 3G/4G mobile base raised 5.4%, but iDEN radio base is being disabled;
- The company presented negative EBITDA. The result suffered the impact of the removal of 800 cell sites from the agreement with Vivo for sharing mobile network infrastructure. Nextel also gave up of renting 1.35 thousand sites;
- Ice Group waits for the approval of the renegotiation of debts by Chinese authorities to complete the acquisition of the operator.
3Q17 Results
Comparing 3Q17 with 3Q16, net revenue increased:
- +4.7% at SKT
- +4.6% at TOTVS
- +2.7% at Entel
- +1.9% at Vonage
- +1.3% at Telecom Itália
- +0.8% at Deutsche Telekom (DT)
- -6.6% at Softbank
Telcomp’s X Seminar
- Telcomp’s X Seminar counted with the presence of Anatel’s president and Anacom (Portugal). Many interesting panels took place in the event;
- The study “Competitive Telecom Operators and the offer of fixed broadband in Brazil”, elaborated by Telecom in partnership with Telcomp, was presented during the event.
Other Highlights
- Brazilian Chamber of Deputies approved the Law Project that forced mobile operators to install cell phone blockers in prisons. Now the project will be sent to Senate;
- Anatel extended for more 120 days the deadline to decide about the use of data allowance;
- Senate approved the designation of Emmanoel Campelo as Anatel’s counselor to replace Igor de Freitas;
- Analog TV switch off in Belo Horizonte was postponed to November 22nd;
- TIM’s postpaid plans will include an additional data allowance to use in video streaming exclusively;
- Anatel approved the readjustment of fixed telephony plans. Vivo will make readjustment of 0.76% and other operators had negative readjustments between -0.02% to -0.24%. Only 3.5 million subscribers use fixed telephony basic plan;
- Vivo started to operate its FTTH network in Pouso Alegre (state of Minas Gerais) and in Petrolina (Pernambuco). Vivo took fiber to 14 new cities in 2017, totalizing 213 cities covered all over the country;
- Hispamar’s Amazonas 5 satellite initiated operations in the orbital position 61st West;
- Seaborn Networks announced the construction of submarine cable system that will connect Brazil to Cap Town, South Africa;
- Broadcom made a hostile offer to acquire Qualcomm for US$130 billion.
Coming Weeks
- Oi will report 3Q17’s results on November 13th;
- We’re still waiting for Anatel’s report over Pay TV statistics of June.
Mobile accesses in September
- The difference that separates 4G from 3G decreased from 9.9 million, in August, to 4.0 million in September. 4G may surpass 3G in October;
- Brazil lost 1,105 thousand mobile accesses in September. Vivo lost 9 thousand accesses, Claro lost 60 thousand, Oi 115 thousand and TIM 963 thousand;
- TIM’s prepaid base continues to shrink more than other operators’. In September, TIM lost 1,322 thousand prepaid accesses, Claro lost 382 thousand, Vivo 316 thousand and Oi 128 thousand;
- On the other hand, TIM led postpaid growth without M2M (+324 thousand), followed by Claro (+238 thousand), Vivo (+201 thousand) and Oi (-11 thousand);
- Vivo was the M2M growth leader (+106 thousand), followed by Claro (+84 thousand),TIM (+35 thousand) and Oi (+25 thousand).
Oi’s Judicial Recovery: decisive week
- Creditors meeting will happen on November 10th and during the meeting the company recovery plan may be approved. Without the approval, Judge will determine Oi’s bankruptcy;
- Through a statement released on Saturday (Nov. 4th), Oi informed that its administrative council approved the modification in the judicial recovery plan that will be sent to creditors meeting;
- The Provisional Measure, which Brazilian Attorney General is creating, will deal all fines Oi owes to Anatel totalizing R$ 15 billion, but it may establish that the application of new rules regarding the payment will rely on the prior approval of a recovery plan;
- China Telecom considers that Oi needs investments of R$ 10 billion. The operator would willing to invest R$ 20 billion in Oi, about R$ 6 billion to get stockholder control, if the meeting approves the new recovery plan;
- Oi’s ON stocks presented growth of 8.6% in the week and PN raised 11.6%.
Results 3Q17: International Operators
Comparing 3Q17 with 3Q16, net revenue increased:
- +29.8% at Samsung (+38.1% in devices)
- +12.2% at Apple
- +4.8% at China Mobile
- -0.5% at France Telecom
- -1.7% at BT
- -3.9% at Sprint
Other Highlights
- Anatel celebrated 20 years of existence on October 31st;
- Eduardo Levy was elected Executive president of Anatel’s consulting board;
- In October, 391 thousand cell phone numbers and 123 thousand fixed telephone number were ported;
- The auction of Telebrás’ satellite capacity had no interested buyers. Apparently the price was considered to be too high.
- America Net plans to start operating its MVNO by the beginning of 2018. The company wants to invest R$ 30 million in the Project along the next five years;
- Nextel concluded the renegotiation of its debt to China Development Bank, Banco do Brasil and Caixa Econômica Federal.
- CenturyLink concluded the acquisition of Level 3 for US$ 34 billion.
Coming Weeks
- TIM will report earnings on November 7th and Nextel will disclosure its results on November 9th;
- Telecomp’s X Seminar will take place in São Paulo on November 7th;
- Oi will hold its creditors meeting on Nov. 10th;
- Igor Vilas Boas’s term as Anatel’s counselor is coming to an end;
- We’re still waiting for Anatel’s report over Pay TV statistics of June.
