Teleco Blog

30
12/2018

Market Cap, Pay TV and others

Eduardo Tude

Market Cap

While top US tech companies lost market value in December, Microsoft, Amazon, Verizon and Netflix were able to close the year higher than in 2017. Apple to Facebook had the biggest losses.

Pay TV in November

Brazil lost 137 thousand Pay TV subscribers in November, losing 522 thousand subscribers in the last 12 months. Among the four main providers, only Oi got new subscribers in November (+2.96 thousand). Claro, Sky and Vivo had net negative additions.

Oi's ON shares raised 0.8% in the week and PN 0.0%.

Other Highlights

Vicente Bandeira de Aquino Neto tomou posse como membro do Conselho da Anatel na sexta-feira (28/12).

Coming Year

Consumer Electronic Show (CES), January 8-11th of 2019 in Las Vegas.

Happy 2019!!!!

23
12/2018

Fixed Broadband, PNAD, General Plan of Universalization Targets, Anatel, Oi, 5G and others

Eduardo Tude

Fixed Broadband in November

Competitive operators led the growth of the fixed Broadband in November with net additions of 105 thousand accesses, followed by Claro (29 thousand). Oi (-22 thousand) and Vivo (-6 thousand) had net negative additions;
The growth occurred in accesses in fiber (+139 thousand) and losses in accesses xDSL (-79 thousand).

IBGE PNAD 2017: Internet, Mobile Accesses and TV

According to the IBGE's continuous PNAD survey in 2017, from the 70.4 million Brazilian households:

94.9% had a telephone, and 69.4% had a cellular phone and only 0.8% had a fixed telephone;
74.9% had access to the internet, 98.7% by cell phone and 52.3% by computer;
79.8% had digital TV converter and 69.7% flat screen TV;
32.5% had satellite dish and 32.8% pay TV.

In 2017, Brazil had 126.3 million internet users (69.9% of those aged 10 years or older), with 97% accessing the cell phone and 56.6% using a microcomputer. 84.3% of Brazilians had a cell phone (141.6 million).

PGMU

The decree of the General Plan of Universalization Targets, which establishes the new universalization goals for telecommunications concessionaires for the period between 2016 and 2020 was finally signed by President Michel Temer;
The new plan brings some good points by reducing the amount of phone booths, not requiring meeting phone booths density targets or minimal distance between them;
Also increases to 4 months, after a request, the deadline for deployment of fixed telephony in new locations;
But it causes controversy by predicting the deployment of wireless fixed access systems in localities that "should technically make feasible, under an industrial exploitation regime, the provision of Internet connection through fourth generation technology - 4G or higher.";
This obligation would be illegal for "directing public resources (from fixed telephony concessions) to companies installing networks to compete with private services, the cellular." (Telesíntese);
Anatel will put in public consultation the General Plan of Universalisation Targets for the period between 2021 and 2025 and the taking of subsidies to review the fixed telephony Concession Contracts.

Anatel

The Senate approved the name of the lawyer Vicente Bandeira of Aquino for the Council of the Anatel in the vacancy of Otávio Rodrigues that had resigned the position a week before. Senate President Euncio de Oliveira, who nominated Vicente, could have had the same agility with the Law Project N. 79 that has waited two years for the approval of the Senate floor;
Moisés Moreira has taken over as advisor to Anatel and will assume the chair of the Implementation Group for the Redistribution and Scanning Process of TV Channels and RTV (Gired);
Anatel published acts with reference values of EILD, VU-M for providers with Significant Market Power and the readjustment of fixed-mobile tariffs.

Oi needed to renegotiate with the former creditors a change in the clauses of the agreement that placed the approval of the General Plan of Universalization Targets as a priority condition for the injection of new resources;
It has pledged to pay fines of up to US$ 45 million if the General Plan of Universalization Targets is not approved until June 30, 2019. The Plan was eventually signed by the president this week;
Pharol, formerly Portugal Telecom, will participate of Oi's capital increase of R$ 4 billion, contrary to what had been reported;
The Oi's ON shares fell 3.9% in the week and in the PN decreased 3.1%.

AT&T has put its 5G network into operation in 12 cities across the United States. It is not in commercial operation because there are still no 5G smartphones being marketed. It is being used by selected people using data terminals;
The 3GPP, responsible for 5G specifications, decided to postpone for 3 months the release 16 that advances in detailing the specifications of 5G for themes like guarantee of latency.

Other Highlights

1.3 million computers were sold in 3Q18, 935 thousand notebooks and 425 thousand desktops. The amount is lower than the previous quarter (1.34 million) due to the reduction in government purchases. (IDC Brazil PCs Tracker);
The city council of Londrina approved a Law Project that authorizes the city hall to sell its stake in Sercomtel without having to make a plebiscite, as determined by two previous laws. (Telesynthesis);
A decree was published establishing public telecommunications policies, maintaining the priority for broadband (fixed and mobile);
The mayor of Porto Alegre sanctioned the new Antenna Law, which will facilitate the licensing and installation of antennas in the city;
Japan's SoftBank IPO, whose main asset is its mobile operator, raised $ 23.1 billion, but shares posted a 14% drop on their first trading day.

Coming Year

Consumer Electronic Show (CES), January 8-11th 2019, in Las Vegas.

2
12/2018

Telecom in October, 5G, Oi and other highlights

Eduardo Tude

Mobile Telephony in October

TIM regained its leadership in prepaid market share by presenting losses of 72,000 prepaid, less than Claro (323,000), Vivo (747,000) and Oi (913,000);
The competition for leadership in this segment might extend through December, accelerated by the shutdown of inactive prepaid. The base for December is the reference for the annual payment of the inspection fee (FISTEL) paid by active cellular;
Vivo led post-paid net additions (311 thousand accesses), followed by Claro (294 thousand), TIM (235 thousand) and Oi (181 thousand). If M2M terminals are not considered, the leadership in net additions is with TIM (215 thousand accesses), followed by Vivo (163 thousand), Claro (151 thousand) and Oi (120 thousand);
Brazil ended October counting 125.8 million 4G mobile accesses, 61.2 million 3G, 25.5 million 2G and 18.4 million M2M terminals.

Fixed Broadband, Pay TV and Fixed Telephony in October

Claro fixed broadband net additions in October (41 thousand accesses), followed by competitive (15 thousand), Vivo (2 thousand) and Oi (-45 thousand). The competitive would have led in net additions if all that reported accesses in September had also done so in October (about +300 thousand accesses);
Oi led the growth of Pay TV in October with net additions of 9 thousand subscribers and became the 3^rd in market share, surpassing Vivo. Brazil lost 103 thousand subscribers in the month, being 72 thousand of DTH and 40 thousand of TV to cable;
Brazil lost 230 thousand fixed telephones in October, 136 thousand acesses of Oi.

I was at the "6^th Global 5G Event Brazil 2018" in Rio de Janeiro this week, which was attended by technicians from Europe, the United States, China, Korea and Japan involved with the specification and implementation of 5G. Discussions ratified the comments I made last week:

The world's top operators are planning to roll out 5G in some cities by 2019, but the more comprehensive launch of 5G networks is expected to begin in 2020;
The first 5G smarthones models will be available in April 2019, according to Ericsson Mobility Report November 2018;
5G is in its beginning and it is necessary to move forward in detailing specifications (release 16) to enable the offer of high availability and low latency services;
The initial motivation for implanting 5G is increased capacity. Most operators must 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 should be for later;
Initial 5G deployments might be made using current sites;
The highest frequencies (millimeter waves) might be used initially for the provision of fixed wireless broadband.

Oi has been monitoring the drop in stocks of technology companies on US stock exchanges;
Oi's ON shares decreased by 12.7% in the week and the PN by 11.5%;
In the last four weeks, Oi's ON shares dropped 51.5% and the PN fell 43.4%.

Other Highlights

Information services GDP (including Telecom) grew by 0.1% in comparison of accumulated in the last four quarters, when compared to the previous four quarters, less than the 1.4% of Brazilian GDP;
Moises Moreira was approved by the Senate and assumes the position of director of Anatel.

Coming Week

Abinee's annual lunch on Friday;
A vote is awaited by the Law Project Senate plenary 79, which authorizes the migration of fixed telephony concessions for authorizations;
The city council of São Paulo is also expected to approve the new municipal antenna law.

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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Market Cap, Pay TV and others

Fixed Broadband, PNAD, General Plan of Universalization Targets, Anatel, Oi, 5G and others

Telecom in October, 5G, Oi and other highlights