10
2/2019

Oi is the mobile leader in Dec/18, TIM, Anatel and other highlights

Eduardo Tude

Oi is the mobile growth leader in Dec/18

• Oi led cell phone growth in Dec/18 with net additions of 291 thousand mobile accesses, due to its prepaid performance (+111 thousand accesses). Vivo, Claro and TIM had negative net adds in the total mobile accesses and prepaid. Will Oi be able to repeat this good performance in 2019?
• TIM maintained its leadership in prepaid market share for having reported lower losses (-251 thousand) in comparison with those of Claro (-2.9 million) in Dec/18;
• Claro was the leader in postpaid net additions in December/18 (397 thousand accesses), followed by Vivo (383 thousand), Oi (180 thousand) and TIM (158 thousand);
• Brazil lost 2.6 million mobile accesses in Dec/18, the same amount as in Dec/17, but operators performed differently in the two months with Oi, which had reported losses of 1.5 million in Dec/17, reporting positive net additions and Vivo, Claro and TIM showing bigger losses in 2018;

 

Oi

• It expired the period of stability given by the judicial recovery plan to Eurico Teles as president of Oi. The deadline was until 02/28/2019 or at the conclusion of the capital increase, whichever occurred first;
• M&A alternatives (merger and acquisitions) to Oi have been re-released by the press, but shareholders are most likely to await the results of the analysis elaborated by consultancies they have hired (Oliver Wyman, BCG and Bank of America Merrill Lynch) to take any initiative. The studies may take about four months;
• York Global Finance, a UK investment fund, has increased its stake in Oi to 12%;
• Oi's ON shares increased by 6.7% in the week and the PNs by 0.7%.

 

Results 2018

Net revenue increased in 2018:

• +24.5% at Twitter;
• +23.3% in Google;
• -1.3% at Millicom.

 

TIM

• Pietro Labriola, who was TIM's COO until October/18, joined TIM's board of directors;
• Telecom Italia's auditors have rejected Vivendi's request to anticipate the shareholders' meeting, which will analyze the replacement of directors in one month;
• TIM is launching its fixed broadband service this month using the 4G network in 15 cities in the state of São Paulo.

 

Anatel

• The Brazilian Federal Court has determined that Anatel will require environmental licensing to authorize any type of telecommunications station in the country in action filed by the Federal Public Ministry of Sergipe. A conciliation hearing will be held in March (Source: Telesíntese);
• Anatel is negotiating with the four largest mobile operators to deploy roaming among them in all municipalities with less than 30,000 inhabitants by the end of the year. These municipalities are usually served by only one mobile operator;
• An analysis prepared by the technical area of Anatel shows that Brazil has the highest tax burden in the fixed broadband among 174 countries;
• Survey carried out by Anatel's Ombudsman Office of indicates that the perception of quality that society has about the services provided by the agency reaches 4.39 in a score of 1 to 6, in which 1 is totally dissatisfied and 6 is totally satisfied;
• Anatel approved an average reduction of 7.75% in the fixed-mobile calls tariff of the concessionaires base plan;
• Anatel plans to launch in ten months the "Anatel Comparador" application, a tool in which the user can compare telecommunications offers by services or bundles, through research. Wouldn't it be better for the agency to stimulate the various comparison apps on the market than to launch its own application?
• The number of complaints about service providers at Anatel is decreasing. They fell 13.6% in 2018, 12.9% in 2017 and 4.3% in 2016.

 

Other Highlights

• The Brazilian IT market is expected to grow 10.5% in 2019, driven by the launch of more expensive smartphone models (IDC);
• Algar Telecom started offering ICT services aimed at the corporate segment in Salvador (BA);
• The fixed broadband via satellite provided by Yahsat is already being offered in 571 municipality of ten Brazilian states. The company intends to serve more than one thousand cities until March;
• Zuum, a mobile payment company created by a joint venture between Telefonica and Mastercard in 2013, ended its activities;
• Telefónica intends to sell its data centers around the world. Similar attitude had already been taken by other carriers, such as Verizon in the USA;
• The CTIA presented a study on the economic impact of reallocating a 400 MHz to 5G band in the 3.45 GHz and 4.2 GHz band during the US Senate public hearing on "Winning the race for 5G and the next era of technological innovation in the United States".

 

Coming weeks

• Claro (Feb/13), TIM (Feb/19) and Vivo (Feb/20) will disclose their 2018 results.
• Mobile World Congress in Barcelona (Feb 25-28)

3
2/2019

2018 in Fixed Broadband, Pay TV, Fixed Tel. and Companies, Oi, MVNO plus Highlights

Eduardo Tude

Fixed Broadband in Dec/18

• According Anatel, Brazil presented negative net adds of -149 thousand accesses (subscribers) in December. This quantity would be, however, positive is we considered 326 thousand accesses from 466 providers that reported accesses in November, but didn't do it in December;
• Claro presented positive net adds (+11.2 thousand) in the month, but Vivo (-15.0 thousand) and Oi (-79.3 thousand) negative;
• Fixed broadband net adds were positive in 4Q18 (+175 thousand accesses). This growth was led by the competitive providers (+258 thousand), followed by Claro (+82 thousand). Vivo (-19 thousand) and Oi (-146 thousand) presented negative net adds;
• The number of accesses faster than 34 Mbps had the biggest growth in the quarter (1.0 million accesses) and fiber registered (569 thousand).

 

Pay TV in 4Q18

• Pay TV lost 224 thousand subscribers in 4Q18, 184 thousand from DTH (satellite) and 91 thousand from cable. IPTV through FTTH network gained 51 thousand subscribers. Despite the losses, 54% of the subscribers in Brazil still have DTH pay TV services;
• Claro (-224 thousand accesses) and Vivo (-34 thousand) lost subscribers in the quarter while Sky (+34 thousand) and Oi (+9 thousand) gained it;
• Although pay TV is being affected by video streaming growth, it still has a long life in Brazil. In the USA, where this transition is more advanced, Kagan consultancy projects that, in 2022, pay TV will be present in 70% of the American homes, despite the loss of 14.3 million subscribers this year.

 

Fixed Telephones in 2018

• Brazil closed 2018 counting 38.3 million fixed telephones, 2.5 million less than in 2017. 250.2 thousand accesses were disconnected in December and a total of 639 thousand in 4Q18;
• Vivo, which is the market leader, disconnected 1.2 million fixed telephones in the years. Oi shut down 1.1 million and Claro 440 thousand.

 

2018's Results

Net revenue increased in 2018:

• +37.4% at Facebook;
• +30.9% at Amazon;
• +15.8% at Microsoft;
• +9.4% at Apple;
• +6.4% at AT&T (due to the incorporation of Time Warner);
• +3.8% at Verizon;
• +2.7% at Ericsson (US$);
• +1.7% at Samsung;
• -0.2% at Sprint;
• -1.2% at LG;
• -1.6% at Entel;
• -2.0 SKY Brasil (estimated by Teleco);
• -2.5% at Nokia (Euros);

 

Smartphones in the world

• 1.4 billion smartphones were sold in the world in 2018, 4.1% less than in 2017. Samsung was the leader by selling 292 million, followed by Apple (209 million) and Huawei (206 million). Huawei sales increased 33.6% while Samsung's dropped 8% and Apple's fell 3.2%; (IDC)
• The Chinese market affected this result by presenting a fall of 27% in smartphone sales. Huawei, market leader, sales increased 16% while Apple's (-13%) and others dropped. (Canalys)

 

Oi

• Goldentree Asset Management LP announced it have achieved ownership interest of 16,20% of all common shares issued by Oi S.A;
• Pharol announced it achieved 5.51% of Oi's capital;
• Oi anticipated the shareholders meeting from April 30th to 26th;
• Oi's ON stocks were up 3.9% in the week and PN 5.2%.

 

MVNO

• America Net reported having 12 thousand mobile accesses in its MVNO, focused in the corporative market, launched in March 2018;
• Anatel authorized Telecall and Digaa Telecom to operate as MVNO. They will use Telefônica/Vivo's network and operate inside the corporative market.

 

5G in the world

• Verizon was the first carrier to launch 5G for fixed broadband in the USA but the products aren't totally within the standards yet. The operator waits for equipment based on standards to expand services. It recognizes, however, that manufacturers focus now is on mobile. 5G smartphones may be available in the 1st semester and broadband terminals in the 2nd semester;
• Optus launched 5G fixed broadband services in two Australian cities.

 

Other highlights

• Claro may start to commercialy operate its networks to IoT, inside LTE CAT-M e NB-IoT standards, in 2Q18;
• Ancine's analysis of the AT&T/Time Warner merger may be concluded in the second semester od 2019 only;
• Algar Telecom amplified four times the network in the south of the state of Minas Gerais, which counts with about 1,200 km of its own fiber;
• Elliott increased to 9.4% the stake at Telecom Itália driving company stocks up. Vivendi, which has 24%, lost the control over the company in 2018;
• Anatel published act giving details over the limits to human exposure to electric, magnetic and electromagnetic fields in radiofrequencies between 8.3 kHz and 300 GHz (CEMRF) generated by radiocommunication transmitting stations and by user terminals;
• Liberty Global's subsidiary in the UK plans to use part of its pipelines and street cabinets to install recharging points for electric vehicles;
• Open Signal’s report for the USA indicates Verizon as the best carrier in 4G availability, video experience and upload speed. AT&T was the best in latency.

 

Coming weeks

• Claro will disclose 2018's results in Feb/13, TIM in Feb/19 and Vivo in Feb/20/02.

 

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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