Teleco Blog

25
11/2018

5G, Oi and other highlights

Eduardo Tude

I was in London lest week at the Global MBB Forum promoted by Huawei and had 5G as the main focus. Here are some comments:

European operators such as EE and Orange plan to launch 5G in some cities by 2019, but the more comprehensive launch of 5G networks is expected to begin in 2020. They await the commercial launch of 5G smartphones, which are expected to be available for the market at the end of the first half of 2019;
The specifications of 5G were concluded in June (Release 15) and are now being developed chipsets that will be used in 5G smartphones;
At a meeting with 35 CTOs of operators attending the event, it became clear that the initial motivation to deploy 5G is capacity increase. Some put Smart Cities in 2nd place;
Most operators might deploy 5G in the non-stand alone (NSA) configuration where the 5G radio uses the core of the 4G network. The adoption of the new "core 5G" that allows the provision of differentiated services using slicing will be for later;
5G deployments should be made using the current sites. The disadvantage in higher frequency (3.5GHz) coverage can be offset by the massive MIMO in the download and other lower frequencies for upload;
The highest frequencies (millimeter waves) should be used initially for the provision of fixed broadband;
The preparation of release 16 of the specifications will now begin, which should have as one of the main points the detailing of latency requirements in order to provide a service with guarantee of latency values.

Goldman Sachs sold 4.73% of Oi's total preferred shares;
Oi's ON shares decreased by 25.0% in the week and the PNs by 19.9%.

Other highlights

According to the continuous Brazilian Dominiciles Survey (PNAD), made by IBGE, in 2017: 92.7% of the Brazilian households had a cell phone, 32.1% had a fixed telephone, 40% had a computer and 38.8% had internet access;
The Law Project N. 79, which authorizes the migration of fixed telephony concessions to authorizations, has received 19 draft proposals and is ready to be analyzed by the Senate plenary;
The Chamber of the state of Porto Alegre approved the new local legislation for the installation of mobile telephone antennas in the city according to the General Law of Antennas;
Anatel granted approximately licenses for frequencies in the 1.8 GHz and 2.5 GHz bands in 110 cities which were auctioned in 2015 to SCM providers;
Brazil and Chile have signed a free trade agreement that includes the elimination of international roaming charges for data and mobile telephony. The Brazilian Government does not have the power to eliminate this charge, but it may encourage the reduction of the values;
4G networks offer faster download speed than Wi-Fi in 50 countries, including Brazil, out of a total of 80 evaluated by Open Signal;
Telecom Italia has appointed Luigi Gubitosi as its new CEO, replacing Amos Genish.

Coming Week

I will participate of the 6th Global 5G Event Brazil 2018 this week in Rio de Janeiro;
The Law Project N. 79 can be approved by the Brazilian Senate;
The Infrastructure Services Commission of the Senate has scheduled for Tuesday, November 27 (Tuesday) the interview with Moisés Moreira who was appointed to fil the vacancy of Anatel's board member. (Telesíntese)

11
11/2018

Results 3Q18 TIM and Nextel, Oi, Anatel and others

Eduardo Tude

Results in 3Q18: TIM

TIM's net revenue increased 4.4% in 3Q18 compared to 3Q17, 2.8% in revenues from mobile services and 11.6% in fixed services;
Data revenues and mobile digital services represented 67.5 %% of service revenues in the quarter;
Recurring EBITDA margin remained stable (38.9%) and the company reported a normalized profit of R$ 388 million in the quarter. Default expenses grew by 60.8%;
TIM activated its NB-IoT network in Itajubá (state of Minas Gerais), a city near Santa Rita do Sapucaí, where its first network with this technology started to operate.

Telecom Italia in 3Q18

Telecom Italia's net revenue fell by 4.1% when we compare 3Q18 with 3Q17, with mobile revenues in Italy falling 3.9% and TIM Brasil's revenues in euros decreasing 15.9%. The company will lower its assets by approximately € 2 billion due to the growing competitive threats;
Telecom Italia has confirmed interest in Nextel and the intention to make an offer has already been approved by the board of the company.

Results 3Q18: Nextel

Nextel improved its performance in 3Q18, first quarter without radios (iDEN);
The total mobile accesses increased 12.7% in comparison between 3Q18 with 3Q17. Revenue decreased 13.7% in this comparison but grew 0.2% in relation to the previous quarter;
Churn dropped to 2.7% in 3Q18 and EBITDA Margin was positive (9%) in the quarter. The company is refarming the 2.1 GHz band in the state of são Paulo in order to amplify 4G offer;
The company increased its value with the change in frequency limits promoted by Anatel what made its acquisition more attractive to the other carriers operating in Brazil.

The Market Arbitration Chamber reconsidered the previous decision favorable to Pharol, and authorized Oi to proceed with the capital increase of R$ 4 billion;
Oi filed with the SEC, the United States market regulator, an amendment to Form F-1 to include the capital increase;
Pharol filed a new lawsuit against Oi in Portugal, seeking compensation of € 2 billion. She claims that Oi didn't provide information at shareholders' meetings held in 2014 and 2015, when it was decided to sell the assets of Portugal Telecom;
Oi is expected to release its results for 3Q18 on November 13;
Oi's ON shares increased by 3.8% in the week and the PN of 4.9%.

Regulation and Anatel

The Law Project that allows the migration of fixed telephony concessions to authorizations was approved by the Senate Science and Technology Commission and sent on an emergency basis to be approved by the Plenary this week;
Since November 8^th Counselor Leonardo Euler de Morais is the new president of Anatel, with a mandate until November 4, 2021. Great choice!
The interview of Moisés Moreira, nominated for counsel to Anatel in the vacancy of Quadros, was postponed in the Senate.

Other Highlights

Samsung introduced its foldable phone that turns into Tablet, but did not disclose the date of its commercial launch;
CommScope acquired ARRIS for $ 7.4 billion.

Coming Weeks

Oi's results;
XI Telcomp Seminar, om November ^13th.

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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5G, Oi and other highlights

Results 3Q18 TIM and Nextel, Oi, Anatel and others