Teleco Blog

28
6/2020

5G, Oi and other highlights

Eduardo Tude

5G in the World

At the end of April China had 65.5 million cell phones, South Korea 6.3 million and the United States around 1.2 million;
There were 63.7 million 5G cell phones in the world in 1Q20, four times more than at the end of 2019. (GSA/Omdia);
There were 5.4 billion 4G cell phones (LTE) in the world at the end of 1Q20, which represented 59.2% of cell phones in the world. In Brazil, 69.7% of cell phones are 4G.

The Goldentree fund reduced its stake in Oi to 4.68% of total common shares;
Oi's ON shares increased by 5.5% in the week and PN by 4.8%.

Other highlights

Vero, the SCM provider, announced the acquisition of MKA Telecom, with operations in the south of the country, integrating 45 thousand customers in 23 municipalities to its operation;
The IT infrastructure market in Brazil registered revenues of US$ 344.68 million in 1Q20, 4.8% more than in 1Q19. (IDC Brazil);
89% of children and adolescents between 3 and 9 years old are Internet users, and 58% of them access the Internet exclusively by cell phone. (ICT Kids 2019);
Brazilian e-commerce earned 56.8% more in the first five months of 2020 compared to the same period last year. (Buy & Trust/ABComm Movement);
The Italian government may increase its stake in Telecom Italia to 25% as part of attempts to accelerate the launch of ultra-fast broadband, Reuters reported. With this increase, it would have a larger stake than Vivendi;
Telecom Italia struck a deal to sell a 33.2% stake in its tower company for 1.6 billion euros, in a move designed to reduce its debt.

Coming Soon

Taxation in IoT, Aliança Conecta Brasil F4 event attended by the president of Anatel and parliamentarians, this Monday at 10 am.
https://aliancaf4.com.br/

21
6/2020

Oi, 5G, Minicom and more

Eduardo Tude

Oi released its results for 1Q20 and filed a proposal in court for an amendment to the approved Judicial Recovery Plan, which would enable the formation of four isolated production units (“UPIs”): Mobile Assets, Towes, Data Center and INFRA CO. Oi plans to raise at least R$ 16.3 billion with the sale of the first three;
Oi would have accepted a binding proposal from Piemonte Holding, based in Rio de Janeiro, for the purchase of the Oi's Data Centers for R$ 325 million;
INFRA CO would take Oi's fiber network and the wholesale business. Oi Wouls keep the provision of services to Customers (B2C and B2B) and the copper network;
In addition to the approval by the Assembly of creditors, these operations require the approval of Anatel and CADE in order to materialize. The structural separation for the creation of INFRA CO is more complex as long as Oi is a fixed-telephony concessionaire and hasn't addressed the issue of its debt with Anatel;
Oi intends to finalize these operations at the end of 2021 and thus exit its judicial reorganization process;
Standard & Poor's reduced the rating of Oi's securities from B- to CC on a global scale, and from brBBB- to brCC on a national scale, due to Oi's proposal for a 60% discount on the face value of debt with banking institutions, by means of an advance payment of commitments;
Oi's ON shares appreciated by 6.9% in the week and PN by 2.8 %, both of which cost more than R$ 1.00.

Anatel published the technical requirements for the certification and commercialization of 5G, NB-IOT and CAT-M equipment;
The U.S. Department of Commerce (DoC) has authorized domestic companies to work with Huawei on 5G standards, removing uncertainties as to whether this was banned under trade restrictions imposed in 2019;
Ericsson doubled to 190 million, its forecast for the global amount of 5G phones later this year, due to the fast adoption in China that exceeds estimates for North America and Europe, hampered by Covid-19's containment measures.

Minicom and Anatel

Federal deputy Fábio Faria (PSL-RN) took over as Minister of Communications;
A presidential decree was published that establishes guidelines for the renewal of spectrum authorizations, allowing the renewal of the authorization of frequencies of cellular operators as provided by the Law. With this decree it will be possible to analyze the reorganization of the 850 MHz band;
Anatel approved TIM's conduct adjustment agreement (TAC).

Other highlights

Banks spent R$ 24.5 billion on ICT in 2019, 24% more than the previous year. These expenses include investments of R $ 8.6 (+ 48% in the year); (Febraban / Deloitte)
Globoplay's subscriber base grew 2.5 times in one year. Mobile Time
The BRFibra group companies (BrFibra, BRDigital and Commcorp) will adopt the BR.Digital Telecom brand.

14
6/2020

Market Cap, Oi, 5G, Minicom and more

Eduardo Tude

Market Cap

The market value of the FAAMG (Facebook, Apple, Amazon, Microsoft and Google) grew in the first five months of the year, despite the pandemic. Apple and Facebook declined in the first months of the year, but recovered later.
The same didn't happen with telecom operators Verizon, AT&T and Vodafone. In Brazil, losses in Reais in this period were 14.4% at Telefonica, 13.1% at TIM and 12.7% at Oi.

The expectation with the disclosure of Oi's 1Q20 results, which may take place on Monday, June 15^th, after the market closes, has led to an increase in the value of the company's shares;
Oi's ON shares appreciated by 21.4% in the week and PN by 11.9%, both of which were worth more than R $ 1.00.

South Korea reached 6.3 million 5G cell phones at the end of April, representing about 10% of the country's cell phone base. SK Telecom has 45% of 5G mobile phones, KT 30% and LG Uplus 25%. The data are from the Ministry of Science and ICT of South Korea.
China has more than 60 million 5G cell phones.

Minicom

Provisional Measure N. 980 recreated the Ministry of Communications with the following powers:

National telecommunications policy;
National broadcasting policy;
Postal, telecommunications and broadcasting services;
Communication and disclosure policy of the Federal Government;
Relationship between the Federal Government and the regional, national and international press;
Convocation of mandatory radio and television networks;
Public opinion poll;
Brazilian public television system.

Federal deputy Fábio Faria (PSD-RN) will be the new Minister of Communications.

Other highlights

83% of students in urban schools in Brazil are internet users, with 18% of them accessing only by cell phone. (TIC educação 2019)
Net additions of mobile devices for IoT are expected to drop in 2020 to half of what they were in 2019, due to the impact of Covid-19. (GSMA Intelligence)
Worldwide sales of broadband access equipment fell 15% in 1Q20, when compared to 1Q19. (Dell´Oro Group)

Coming Soon

Oi's 1Q20 earnings release on June 15^th after the close of trading.

7
6/2020

Bands by Operator, Pay TV, Oi and more

Eduardo Tude

Quality and Bands for Mobile Telephony

Anatel published an updated table containing the total of bands of each operator by Federative Unity;
Claro is the operator having more bandwidth, thanks to the acquisition of Nextel. It had more bandwidth than the others (110 to 150) for frequencies between 1 and 3 GHz in all Brazilian states;
At frequencies below 1 GHz, Claro and Vivo have an average of 50 MHz per UF. TIM and Oi have a smaller amount in this frequency range;
Read more: https://www.teleco.com.br/en/en_areasc.asp
The availability of bandwidth is one of the factors that contributes to a better quality of service.

Report released by Tutela on the state of mobile networks in Brazil, pointed out Claro as the best in four of the five metrics evaluated:

Excellent and consistent quality (Covered area for video streaming)
Quality for consistent core services (Area Covered for social networks)
Download speed (14.8 Mbps)
Upload Speed (6.0 Mbps)

Tim was the best in Latency (19.2 ms)

Covid-19 Effect on Pay TV

Although consumers are reducing domestic expenses, due to the COVID-19 crisis, the demand for entertainment services has increased;
In the first week of the quarantine (16 and 22/03) the weekly average of the total viewers of pay TV channels in Brazil increased by 22% in absolute numbers. This increase continued the following week, reaching 8.95 audience points, more than the 7% average before the quarantine. The increase occurred mainly in news and film channels; (Ancine/IBOPE)
Losses in pay TV subscribers in Brazil were lower in April (-26 thousand) than in March (-93 thousand) and February (-70 thousand);
In the United States, penetration of pay TV stabilized in 62% of households in 1Q20, it was 63% in 3Q19. The penetration of OTTs video streaming services grew from 71% to 76% in this period.

Oi's ON shares appreciated by 12% in the week and PN by 14.5%.

Coming Soon

The presentations of the IoT 2020 BRASIL SUMMIT, held on June 3, are available to watch on demand (in Portuguese);
Oi's 1Q20 earnings will be released on June 15th.

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

Oi, 5G, Minicom and more

Market Cap, Oi, 5G, Minicom and more

Bands by Operator, Pay TV, Oi and more