Teleco Blog

11
7/2021

Explosion and Consolidation of Competitive Providers

Eduardo Tude

The TIC Providers survey shows the distribution of 12.1 thousand competitive fixed broadband providers according to the year in which they started providing this service. The peak occurred in 2018 with 1,700 providers.
These providers are now undergoing a process of capitalization and consolidation.

Desktop and Unifique start IPO

Desktop began the share reserve period for its initial public offering (IPO). Shares must be traded on the stock exchange (B3) from July 21^st.
Unifique is due to start the share reserve period on July 12^th. The shares will start trading on the stock exchange on July 27^th.
Brisanet will be the next.

Conexão Group was sold to Grain

Grain Management is the new controller of Conexão Group, also known as Triple Play. The Group was formed the manager of private equity Acon, which acquired providers such as Cabo Telecom and Multiplay.
This week, the MCom authorized Conexão Group Brasil to issue up to R$ 400 million in debentures with incentives for investment in telecom projects.

More acquisitions

MHNET, SCM provider in the South region, completed the acquisition of three providers: Optinet, Frosinet and GW Telecom.
The Brasil TecPar group announced the acquisition of Intnet, a SCM provider that operates in the Lagos region of Rio de Janeiro.
Cade approved the purchase of Copel Telecom by the Bordeaux fund.
Anatel approved the sale of Ligue Mobile and Ligue Pay TV to Sumicity, a company of the EB Fibra group.

InfraCo, Oi's fiber optic unit, was sold in a judicial auction to a group of investors formed by BTG. The completion of this transaction now depends on the approval of Anatel and CADE.
Oi rectified the value of its net loss in 1Q21 from R$ 3,508 million to R$ 3,041 billion. The change occurred due to correction in asset depreciation.
Oi's ON shares presented losses of 4.4% and PN of 3.9% during the week.

More highlights in Brazil

The STF extended for 25 days the effects of Law 14172/202, which provides for the transfer of R$ 3.5 billion from Fust to states and municipalities to guarantee Internet access for teachers and students in the public education system during the pandemic.
Vivo started operating its fiber network in Descalvado, in the interior of São Paulo.
The Chamber of Deputies approved Bill 2646/20 that creates infrastructure debentures, to be issued by public service providers. The proposal now goes to the Senate.
Adrian Calaza, Financial Director at TIM decided to leave the operator. Telecom Italia also announced that Stefano Siragusa will assume the role of Chief Revenue Officer in place of Federico Rigoni.

More international highlights

MWC 21 in Barcelona was a success, with 120 thousand people accessing the event on virtual or physically platforms (20 thousand).
Global mobile content revenue reached US$ 121.7 billion in 2020, up 24% from the previous year. Mobile games represent 69% of this revenue. (MEF)
The US lost 18 million pay TV subscribers between 2014 and 2020, while 40% of broadband households in the US started to contract only fixed broadband and no longer a bundle with other services. (Parks)
A 37 group of US Attorneys General filed a lawsuit alleging that Google used anti-competitive practices in its Play Store to reduce access to alternative apps and payment options, resulting in harm to small businesses and users.
They argued against Google's policy of charging a 30 percent commission on in-app purchases and accused the tech giant of buying competitors to maintain its dominance.

Coming Weeks

Claro's 2Q21 Results: Claro (July 13^th), TIM (July 26^th) and Vivo (July 27^th)
5G & Digital Transformation 2021: Sep. 1^st

4
7/2021

Broadband and Cell phones in May, MWC 2021, M&A and more

Eduardo Tude

Accesses in May

Competitives presented negative fixed broadband net adds (-440 thousand), but these net adds become positive (+154 thousand) when only providers that reported accesses to Anatel in April and May 2021 are considered. In April, 6.2 thousand providers reported their number of accesses and in May 5.8 thousand reported it.
Claro (556 thousand), Vivo (552 thousand) and Oi (526 thousand) showed an expressive growth in mobile in May. MVNOs (73 thousand) grew more than TIM (5 thousand).
Claro led in postpaid net adds (427 thousand) and Oi in prepaid (288 thousand).
Pay TV lost 173 thousand subscribers, 78 thousand from Claro and 78 thousand from SKY.
Brazil lost 135 thousand fixed telephone subscribers, 117 thousand of them from Vivo.

Death notice: César Rômulo Silveira Neto

We, at Teleco, could not fail to express our regret at the passing of César Rômulo Silveiro Neto, one of the great supporters and collaborators of Teleco, with whom we had an intense relationship during his performance as General Secretary of SindiTelebrasil, Telebrasil and Febratel.
César was a professional with deep knowledge of the telecommunications sector, dedicated and tireless, always concerned about the future of the country. A loss that will be felt.

MWC 2021

This week the Mobile World Congress 2021 took place in Barcelona in a hybrid format (in person and online).
Having 5G as background, several topics were discussed: how will EDGE be implemented, when will we have massive use of slicing, the integration of the new 5G core with the public Cloud and Open Ran.
Among the Keynotes and various panels, I highlight what was about network sharing. China Telecom and China Unicom implemented a 5G network with “active sharing” with more than 400 thousand shared sites. One physical 5G network and two logical networks.
A Brazilian delegation led by the Minister of Communications participated in the event.
Meanwhile, in Brazil, TIM has activated 5G DSS on its networks in Fortaleza, Recife and Salvador.

The Court of Justice of Rio de Janeiro ruled against the appeals of the banks Santander, Caixa Econômica Federal, Itaú, Banco do Nordeste and Banco do Brasil, against the approval of Oi's recovery plan, amended in September 2020.
Oi's ON shares appreciated by 4.6% and PN shares by 5.9% during the week.

M&A

The EB Capital fund announced the acquisition of Wirelink, a SCM provider operating in the B2B market in the Northeast of the country.
Telefônica Brasil concluded the sale of 50% of its fiber unit (Fibrasil) to the Canadian fund CDPQ.
Surf Telecom was authorized by the MCom to issue R$ 500 million in incentive debentures.
QMC (Tower Company) issued debentures in the amount of R$ 500 million.
JPMorgan acquired 40% of C6 Bank, fintech that has a strategic partnership with TIM.

More Highlights

The agreement between Brazil and Chile was approved by the Chamber of Deputies, which provides for the elimination of international roaming charges for visiting cell phones between these two countries. The agreement will now be considered by the Senate. The usual question is who will pay this bill.
Anatel released R$ 165 million from the balance of the digitalization of open TV to be used in Infovia 01 of the Norte Conectado program.
MCom and Telebrás signed an amendment to the Gesac contract for the installation of another two thousand points of the Wi-Fi Brazil Program (new name for Gesac).
Brazil was ranked 18^th in the ITU's Global Cybersecurity Index 2020 ranking and ranks 1^st in Latin America.
Rio Grande do Sul took 1^st place in the Digital Public Services Offer Index of the Brazilian Association of State Entities of Information Technology and Communication.

Coming Weeks

June 29-30: Fiber Connect Latam
Jun 30: Open RAN 2021 LATAM Web Series

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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Explosion and Consolidation of Competitive Providers

Broadband and Cell phones in May, MWC 2021, M&A and more