Teleco Blog

28
4/2019

Revenue, Mobile Accesses and Pay TV in Mar/19 and more

Eduardo Tude

Revenue growth in 1Q19 compared with 1Q18

Facebook (26%), Netflix (22%), Twitter (18%), Amazon (17%) and Microsoft (14%) continued to show double-digit growth. Microsoft ended the week with US$ 995 billion in the market, higher than Apple's ($ 963 billion) and Amazon ($ 960 billion);
Huawei (39%) and Ericsson (13%) also posted strong growth, boosted by contracts to 5G;
AT&T grew 18% due to the incorporation of Time Warner.

Mobile Accesses in Mar/19

Brazilian mobile base continued to shrink in March (-90 thousand accesses). Prepaid losses (-997 thousand) were largely offset by postpaid gains (907 thousand), of which 431 thousand were M2M terminals;
Vivo (103 thousand accesses), MVNOs (84 thousand) and Nextel (32 thousand) had positive net additions in the month, while TIM (-260 thousand), Claro (-34 thousand) and Oi (-8 thousand) had losses;
Claro led the postpaid growth, with M2M (328 thousand accesses) and without it (182 thousand). Vivo had net additions of 251 thousand (107 thousand without M2M), TIM of 140 thousand and Oi of 75 thousand;
Claro (-361 thousand accesses) and TIM (-335 thousand) had the largest losses in the prepaid, followed by Vivo (-148 thousand) and Oi (-148 thousand);
With net additions of 2.3 million 4G mobiles in the month, Brazil now has 136 million 4G mobiles (March), representing 66% of its cellular handset base.

Pay TV in 1Q19

Pay TV continued to shrink in March (-155 thousand accesses) and in the quarter (-383 thousand). The largest losses in the quarter were in DTH (-296 thousand), but Cable TV also had losses (-132 thousand);
Claro posted the largest losses (-212 thousand accesses), followed by SKY (-97 thousand), Vivo (-46 thousand) and Oi (-14 thousand);
SKY's net revenue in 1Q19 was 7.4% lower than in 1Q18.

Satellite

Yahsat, the satellite broadband operator, has begun offering its services in 34 other cities in Pará. It already offers its services in sixteen states. The goal is to reach more than 1 thousand Brazilian cities by the end of the first half of this year;
Hispamar inaugurated its new teleport and satellite control center in Serviente (RJ). The company invested more than R$ 40 million in it;
Intelsat announced the loss of the Intelsat 29e satellite due to damage to the propulsion system.

Other highlights

Oi's shares raised 1.8% in the week and the PN of 1.2%;
Sercomtel's net revenue in 2018 (R$ 188 million) was 6.7% lower than in 2017. The operator reported net profit of R$ 1.8 million in the year, reversing the loss of R$ 4.4 million in 2017;
Vivo activated its fiber network (FTTH) in five cities: Caçapava (SP), Mogi Guaçu (SP), São Bento do Sul (SC), Mafra (SC) and Cabedelo (PB);
Telefónica appeled to the Brazilian Supreme Court, questioning the exchange of targets for payphones (Fixed Telephony) for target to the mobile service (ERBs 4G), as established in Decree 9619 of 12/20/2018, which approved the new Universalization Targets (PGMU);
Brazil had 180 million PCs in 2018, according to FGV's 30th Annual Survey of IT Use in Companies 2019. Expenses and Investments in IT accounted for 7.9% of net sales of medium and large companies;
Anatel will place a public consultation over the expansion from 40 to 60 MHz of the band destined to the Global Mobile Satellite Service (SMGS) in Band S (2 GHz) and the possibility of using the L Band (1.5 GHz) by the Mobile Service Staff (SMP);
The launch of Samsung's foldable smartphone was postponed indefinitely due to problems encountered by reviewers;

Coming weeks

Results registered by América Móvil and Claro in 1T19 (Abril/28);
Painel Telebrasil, May 21-23, where I'll announce the results of the Ranking of Internet-friendly Cities and the Ranking of Smart Cities Services.

21
4/2019

5G, Huawei, Ericsson, IoT and more

Eduardo Tude

5G and Huawei

5G is coming faster than 4G, as shown in the image about the first year of each of these technologies. This was one of the key messages of the Global Analyst Summit (HAS 2019) promoted by Huawei in Shenzhen and where I was present;
High-speed broadband (eMBB) applications are pushing this initial phase of 5G growth, but it is already possible to glimpse how new applications will advance with low latency and high availability requirements. They will be available in limited areas (University Campuses, Factories, Stadiums, ...) to meet specific demands of solutions, such as real-time solutions;
One of the main "use cases" is the use of 5G in factories. Volkswagen will start building its own 5G mobile networks in 122 factories in Germany in 2020. It has already started the bidding process for 5G network equipment suppliers;
During the HAS 2019 it was also possible to understand Huawei's R&D investment process. It invested US$ 15 billion in R&D in 2018, with US$ 300 million in universities;
Germany's regulator has confirmed that Huawei will not be excluded from 5G contracts in the country. (Financial Times). Huawei has already accumulated 40 5G contracts.

Ericsson

The 5G contracts boosted Ericsson's revenue, which grew 13% in 1Q19 reaching US$ 5.29 billion. Profit in the quarter hit US$ 260 million, reversing the loss registered in 1Q18. The company claims to have 15 contracts for 5G;
Ericsson may receive a fine of considerable value in the U.S. in an investigation about the company's suitability for anti-corruption rules. The Chinese government has also opened an investigation over licensing contracts with local companies.

Oi presented a negative Cash Generation of R$ 1,761 million in the first two months of the year. Receipts had a reduction of R$ 245 million and payments of R$ 521 million. R$ 1,085 million were invested in this period;
With the capital increase, which represented a cash inflow of R$ 4,007 million, the final balance of the Financial Cashier had an increase of R$ 3,044 million in Jan/19, totaling R$ 7,513 million. In February, the final balance of the Financial Cashier had a reduction of R$ 1,572 million, totaling R$ 5,943 million;
Oi's ON and PN shares appreciated 1.9% in the week.

IoT

Federal Deputy Eduardo Cury issued a favorable opinion to the project that establishes zero taxation for IoT. The project should now be voted by the Finance and Taxation Committee of the House and, if approved, will go to the Constitution and Justice Commission;
ITU approved the recommendation of the architectural reference model for IoT devices whose proposal was presented by Brazil. The model defines a device classification based on processing capabilities and connectivity;
The presentations of the 3rd edition of the IoT Brasil Summit, an online event promoted by Teleco and Telesemana, are available to be viewed on demand on https://telecomwebinar.com/iot-brasil-summit-2019/

Other highlights

Anatel's president, Leonardo Euler de Morais, sent a letter to the president of the Senate presenting the main needs of legislation changes for the development of the sector. These include: the approval of the Law Project n.79, Fistel reduction projects for IoT and Vsat, and the need to revisit the limitations to cross-control between telecom providers and content providers established in the SeAC law;
ANATEL and ANEEL intend to launch in the second half of the year a new proposal for the sharing of street posts;
The Vinci Fund, which bought Via Real, Powerline and six other suppliers of fixed broadband have launched its new brand called Vero;
The domain ".br" has completed 30 years (Telesíntese);
Qualcomm and Apple have announced an agreement to terminate legal disputes over patent licensing. As part of the deal, Apple, which questioned how Qualcomm charges for patents, has signed a chipset purchase agreement and will pay an undisclosed sum to Qualcomm. Apple was in the risk of running out of 5G chipset suppliers as Intel, an alternative vendor that was developing 5G chipsets, gave up producing them;
The FCC Chairman has opposed China Mobile's authorization to provide services in the United States because it believes that protecting the country's communications networks is critical to national security. The paranoia continues;
The Council of the European Union has approved new rules to regulate copyright in the bloc. Under the new rules, which are due to come into effect two years from now, newspapers, news sites and audio-visual companies will receive copyright for the sharing or transmission of snippets of their content on digital platforms. Facebook, for example, is forced to pay for news sites whose links or information are shared through its platforms. (Telesíntese)

Coming weeks

I will be coordinating a panel about 5G during the 5G & LTE Latin America;
Painel Telebrasil, May 21-23, where I'll announce the results of the Ranking of Internet-friendly Cities and the Ranking of Smart Cities Services.

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).

☰

Revenue, Mobile Accesses and Pay TV in Mar/19 and more

5G, Huawei, Ericsson, IoT and more