Mobile Telephony in April
- Mobile telephony had negative net additions again in April (-80 thousand). Net adds of 907 thousand postpaid accesses were not sufficient to make up for the losses in prepaid (987 thousand);
- Claro led growth with net additions of 183 thousand cell phones in Apr/18, followed by Oi (43 thousand), Nextel and MVNOs (22 thousand). TIM (-351 thousand) and Vivo (-22 thousand) had negative net adds;
- Vivo led postpaid net additions (295 thousand), followed by Claro (268 thousand), TIM (208 thousand), Oi 84 thousand and Nextel (27 thousand);
- These positions do not change if the net additions of M2M of these operators were discounted: Vivo (124 thousand), Claro (99 thousand), TIM (69 thousand) and Oi (23 thousand);
- Despite of still presenting higher losses than the other operators in the prepaid, TIM improved its performance in M2M. Its net adds in M2M in April (69 thousand) were greater than those of 1Q18 (total of 61 thousand);
- TIM led losses in the prepaid (-559 thousand), followed by Vivo (-337 thousand), Claro (-85 thousand) and Oi (-41 thousand);
- 4G already represents 51% of Brazil's handset base (excluding data terminals). There are 112 million 4G cell phones against 75 million with 3G technology.
Telebrasil Panel
- The Telebrasil Panel gathered together, in Brasilia, the main executives and authorities of the telecom market, discussing strategies, policies, investments and the sectorial conjuncture. Minister Kassab, the president of Anatel and several federal deputies attended the meeting. As a result of the event, Telebrasil announced the Letter of Brasilia 2018.
Details on (in Portuguese): http://teleco.com.br/eventos/telebrasil_18.asp
Ranking Internet-friendly cities
- Uberlândia was, for the third time, the 1st place in the ranking of Internet-friendly cities developed by Teleco, which aims to identify, among the 100 largest Brazilian municipalities, those that facilitate the installation of infrastructure for ERBs and telecom networks. The highlight was the city of Ponta Grossa that climbed 20 positions in the ranking after changing the municipal legislation;
- The ranking has stimulated the revision of the municipal regulation that needs to conform to the Law of Antennas;
- São Paulo and Porto Alegre were present at the Telebrasil Panel session where I presented the results of the 2018 ranking and reported the advances in forwarding projects to change the legislation of these municipalities.
Details on (in Portuguese): http://teleco.com.br/cidades_amigas_BL.asp
Ranking of smart city services
- Juiz de Fora was the winner of the first edition of the ranking of smart city services which was developed by Teleco and aims to identify the Brazilian municipalities with a greater offer of intelligent services for the citizen.
Details on (in Portuguese): http://teleco.com.br/Cidades_Inteligentes.asp
Oi
- Oi should announce its results for 1Q18 on Monday, May 28th. It intends to anticipate the accounting recognition of the conversion of debt into shares by the creditors;
- On May 29th, a hearing with Oi and Pharol in the US Court, is scheduled to take place in the United States;
- During the Telebrasil Panel, Oi’s president, Eurico Teles, warned that "The General Telecommunications Law, modified by PLC 79, is urgent, it can not be delayed.";
- Oi's ON shares decreased by 9.6% in the week and the PNs by 11.3%.
GDPR (General Data Protection Regulation)
The new regulation on the protection of personal data of the European Union has entered into force. The affected companies must:
- Report severe data violations within 72 hours;
- Provide customers with a copy of their personal data, correct inaccuracies in the data and delete them at customer's request;
- Obtain the explicit consent of each client to track them through websites and applications, or respect their opt-out option.
Those who break the rules can receive fines of up to € 20 million ($ 23.4 million) or 4% of their annual revenue, whichever is greater.
Other highlights
- Luiz Henrique Barbosa da Silva, of Centurylink company, took over as chairman of Telcomp's board. Tomas Fuchs, from Datora, will be the vice president;
- Cemig published the tender offer for the sale of Cemig Telecom. The deadline for submission of proposals and the tender guarantee will be between July 16th and 20th;
- This week, Netflix surpassed, in market cap ($ 150.3 billion), Comcast, the largest cable TV operator in the United States;
- Netflix’s services will be integrated into Telefónica's video and TV platforms in Europe and Latin America. The two companies announced a Global partnership;
- ZTE will have to pay $ 1.3 billion in fines, agree to buy US equipment and change its leaders so that the United States suspend sanctions on the company.
Comming week
- Oi reports its results for 1Q18 on Monday (May 28th).
TIM in 1Q18
- TIM repeated in 1Q18 the good performance of previous quarters. In the comparison of 1Q18 with 1Q17, TIM's total net revenue grew 4.8%, with mobile services revenue increasing 6.0%. Data revenue grew 32.5% and voice revenue fell 22.6%. The EBITDA margin reached 35.5% and net profit hit R $ 250 million;
- It continues, however, losing market share in total handsets. Net additions of 0.6 million postpaid accounted for less than half of the 1.4 million prepaid losses;
- Despite good results in the quarter, TIM shares fell 8.8% in the week due to the announcement that the operator will pay Telecom Italia 0.5% of its annual net revenue from usage royalties of brand. Despite being a common practice in the market, TIM did not make this type of payment;
- The Telecom Italia's board whose control switched from Vivendi to the Elliot group confirmed Amos Genish as CEO of the company.
Nextel in 1Q18
- Nextel reported net revenue of R$ 587 million in 1Q18, a decrease of 25.1% over 1Q17
- The company has been losing revenue from the process of deactivating its iDEN radio, which should be shut down this semester. Its base, which was 686 thousand radios in 1Q17, fell to 230 thousand in 1Q18. The cellular base grew 5.2% in this period ending 1Q18 with 3.0 million cell phones;
- The company's EBITDA margin continued negative in the quarter.
ERBs
- Brazil ended 1Q18 with 90,100 ERBs, installed in 57,100 sites according to TowerExchange. The American Tower would have 18,900 towers, SBA 8,400 and 16,000 sites would still be in the hands of operators, most of Claro who did not sell their sites.
- Ranking Internet-friendly Cities
- I was this week at the meeting of the National Front of Mayors (FNV) in Niterói to present the project of Ranking Internet Friendly Cities. The 2018 edition of the Ranking will be presented on May 22nd during the Telebrasil Panel, along with the 1st edition of the Ranking of Intelligent Cities Services.
Regulatory
- PLC 79/2016 continues to have problems to be analyzed by the Senate. Senate President Eunice de Oliveira sent the bill back to the CCT, which held a public hearing on the project. Some Senators, however, say that the bill has already been approved by the commission and do not want to go through further scrapping for its approval
- One of the critical points in the debate is the value of reversible assets. Anatel understands that they can only be calculated after sanctioning of PLC 79. Time passes and the project loses its value. If not approved this year, the exit may be waiting for the end of the fixed-line concessions term in 2025;
- The agreement of Gesac, of MCTIC, which offers satellite internet connection and allows the use of OTTS by schools and health posts will have to be renewed for another year with STFC concessionaires, if the Justice does not decide in the coming weeks the question of the partnership between Telebras and Viasat for the commercial exploitation of the Brazilian satellite;
- The agreement of Gesac, of MCTIC, which offers satellite internet connection and allows the use of OTTS by schools and health posts will have to be renewed for another year with STFC concessionaires, if the Justice does not decide in the coming weeks the question of the partnership between Telebras and Viasat for the commercial exploitation of the Brazilian satellite;
- OTTs are applications accessed or delivered in the public network that can replace, in a direct or functional way, the traditional telecommunications services. This definition of OTT, proposed by Brazil, was adopted by the ITU;
- The blocking of irregular cell phones started as of 02/22/2018 in the Federal District and Goiás began.
Oi
- Oi will announce its results for 1Q18 on May 15th (Tuesday);
- Oi's ON shares decreased by 0.3% in the week and the NP of 1.5%.
Pay TV in the US
According to Parks Associates:
- 27% of US-based pay TV households claim that sports programming is the main reason they subscribe to the service;
- 52% of US broadband households have pay TV and one or more OTT video services;
- 10% of US broadband households have changed, decreased, or canceled their pay TV in the last 12 months;
- 10% das famílias que utilizam banda larga nos EUA mudaram, diminuíram ou cancelaram sua TV por assinatura nos últimos 12 meses.
- Families using broadband in the US spend $ 23 on average for video entertainment per month.
Other highlights
- Revenue from Internet Hosting services in Brazil in 2017 totaled R $ 1.4 billion, 9.5% more than in 2016 (Abrahosting - Brazilian Association of Internet Hosting Infrastructure Companies);
- GlobeNet has announced plans to deploy a new 2,500 km submarine cable to connect Rio de Janeiro and São Paulo with Buenos Aires;
- ZTE has announced that "the company's main operating activities have ceased" following a ban imposed by the US government, but added that it is still working to find a solution. Reuters reported that the company appears to have suspended its online stores on its own website and on Alibaba's e-commerce platform;
- Vodafone closed the € 18.4 billion (US $ 21.8 billion) deal for the acquisition of Liberty Global, a broadband and cable operator in Germany and Eastern Europe.
Broadband in 1Q18
- The fixed broadband had net additions of 278 thousand accesses in March, 260 thousand of which were 11.9% of total accesses;
- Competitive operators led the growth in the month (194 thousand), followed by Claro (60 thousand), Vivo (52 thousand) and Oi (-27 thousand);
- Vivo put into operation its FTTH network in Guaratinguetá and Jaú, now serving 53 municipalities in the state of São Paulo with this technology.
Smartphones in the world in 1Q18:
- The total number of smartphones sold worldwide was 2.9% lower in 1Q18, when compared to 1Q17, due to a drop in sales in China (IDC);
- Samsung continues to lead with 23.4% of sales, followed by Apple (15.6%), Huawei (11.8%), Xiaomi (8.4%) and OPPO (7.1%);
- Apple's net revenue from the sale of Iphones grew 14.4% in 1Q18 compared to 1Q17, despite handset sales up 2.9%. Apple's net income rose 25.3 percent in this comparison to $ 13.8 billion.
Oi
Monthly report of the Oi's Administrator for Feb 18th:
- Net Operating Cash Generation: - R$ 250 million
- Investments: R$ 430 millio
- Final Balance of the Financial Fund: R$ 219 million decrease, totaling R$ 5,909 million
Oi's ON shares showed appreciation of 2.3% in the week and the NP of 3.7%.
Regulatory
- Anatel decided to maintain at R $ 3.7 billion the value of the PGMU balance due by STFC concessionaires, of which R $ 2.8 billion is from Oi. Anatel's board recommended that this balance be linked to the public policies defined by government and the PERT (Structural Plan for Telecommunications Networks).
- The TCU has released the Executive Branch to use Fistel's surplus for current expenses provided that Anatel's normal operation and the amount for the National Fund for Culture (FNC) and the National Fund for Scientific and Technological Development (FNDCT) are guaranteed. The government intends to use Fistel's $ 10.5 billion to comply with the "golden rule," which prevents government from issuing debt to cover current expenses.
Other highlights
- 2 million phone number were ported in Brazil along the first four months of the year, 28.8% growth over the same period of 2017. From this total 77% were mobile numbers;
- Elliott Management won the dispute with Vivendi for control of Telecom Italia securing two-thirds of the council at a meeting held this week. Amos Genish is expected to continue as CEO of the company, but Elliott must promote changes in the strategic plan;
- SNAP posted a net loss of $ 386 million, up from $ 221 million in 1Q17, although revenue increased 54 percent to $ 231 million.
