5G, Oi and more
Eduardo Tude
5G
Opensignal has released test results from 5G commercial operations in 12 countries. The main conclusions are:
- Average download speeds range from 51 MHz in the United States to 414 MHz in Saudi Arabia. They range from 1.4 to 14.3 times the speed of 4G;
- The five countries where the 5G user spends the most time connected with this technology are Saudi Arabia (34.4%), Kuwait (29.1%), Hong Kong (26.1%), South Korea (20.7%) and the United States (19.3%);
- United Kingdom (4.5%), Australia (8.6%) and Canada (8.88) are those with the worst availability;
- The US has lower 5G download speeds because it has little spectrum at 3.5 GHz available and uses frequencies <1 GHz (600 MHz/T-Mobile and 850 MHz/AT&T);
- Frequencies <1GHz offer excellent availability and range, but speeds closer to 4G. Verizon offers 5G in millimeter waves with a speed of 495 MHz, but with users connected in only 0.4% of the time.
The first 3.5 GHz to 5G auction in the USA (Auction 105) raised US$ 4.6 billion from the sale of 70 MHz divided into 20,625 thousand regional licenses.
China reached more than 133.4 million 5G mobile phones in July, 84.1 million from China Mobile and 49.3 million from China Telecom. China Unicom does not disclose this information.
The GSMA announced that Huawei, ZTE, Ericsson and Nokia were approved by an independent security audit that analyzed product development and the life cycle of management processes. They can now send the network kit for evaluation in a second round of testing.
Oi
- 26,9 thousand Oi creditors will be able to participate in the Creditors' General Meeting to be held on September 8th, virtually;
- Oi's ON shares appreciated 0.6% in the week and PN fell 2.1%.
More highlights
- Vivo's FTTH network went into operation in nine more municipalities, totalizing of 235;
- Last week, the 2020 edition of the Internet Friendly Cities and Smart City Services rankings was launched.
Mergers and acquisitions, Oi and more
Eduardo Tude
I invite everyone to participate this Tuesday (August 25th), at 10 am, to the launch of the 2020 edition of the Internet Friendly and Smart Services Rankings. Besides the 4th edition of the seminar 5G & Digital Transformation will happen on August 26th. (Links at the end)
Competitive Mergers and Acquisitions
Even in times of pandemic, the market for mergers and acquisitions (M&A) remains in full activity in Brazil among SCM operators (Competitive). This week were announced:
- Vero's acquisition of INB. With INB (+66 thousand), Vero will have 419 thousand broadband accesses in June;
- The acquisition of Mob Telecom by the EB Capital fund that acquired Sumicity in 2018. The merger of the two companies will take the group to 5th place among the competitive companies with 279 thousand fixed broadband accesses;
- With the sale of Sercomtel to the Bordeaux fund, Copel will lose approximately 100 thousand fixed broadband accesses, being out the group of the ten largest compnies;
- Copel Telecom intends to publish the public notice for the sale of the company in the coming weeks and close the process in 1Q21.
The consolidation process is leading to the emergence of medium-sized operators able to compete with Claro, Vivo and Oi. The proposal to create neutral networks is a way for Vivo, Oi and TIM to expand their fiber networks to compete with these companies.
Oi
- The Court determined that the Creditors General Meeting be held virtually on September 8th;
- The creditor banks are against the plan presented, which states a 60% discount on the face value of the debt with them, what does not exist in the current plan;
- Oi announced that it had 1.5 million customers with internet access on its FTTH network in July. In June, Oi had 1.6 million fiber accesses, part of which is not FTTH. The FTTH network is present in 127 cities;
- Oi's ON shares appreciated 6.2% in the week and PN fell 0.4%.
More Highlights
- Finally, the National Department of Transport Infrastructure (DNIT) decided to regulate the use, without charge, of federal highway domain bands by telecom companies, as established in the Antenna Law (n.13.116/2015);
- TIM announced the begining of operation of its FTTH network in Belo Horizonte, becoming present in 29 cities with this technology;
- Santos launched its MVNO with the sale of chips (Chipeixão) using Dry, accredited by Surf Telecom;
- São Paulo traffic exchange point (PTT) surpassed the 10 Tbps mark. It centralizes 75% of total internet traffic on CGI's PTTs;
- The average price per MHz/Pop paid in millimeter frequency auctions in the world is 10 to 100 times lower than that paid for frequencies in Band C, such as that of 3.5 GHz in Brazil. (GSA)
Coming Weeks
Oi, Algar, 5G and more
Eduardo Tude
Oi
Oi presented its results for 2Q20 maintaining the trends of the previous quarters:
- Drop in revenue of 11% compared to 2Q19 and 4.5% compared to 1Q20;
Routine EBITDA margin of 30.3% and loss of R$ 3.4 billion;
- The net debt grew to R$ 20 billion;
Capex of R$ 1,750 million, 64% of which was invested in the fiber network and wholesale;
- Oi's strategy is to migrate services from copper to fiber, but xDSL (copper) broadband accesses are still double that of fiber.
Oi also presented an update of the amendment to the judicial recovery plan to be submitted on September 8th to the General Meeting of Creditors with the following highlights:
- Highline and Piemont became "stalking horse" (right to match the highest offer) in the tower and data center auctions, respectively. The “stalking horse” for the Oi mobile auction is not yet defined. These auctions will be held until the end of the year;
- The minimum value of UPI Infra Co, which will include Oi's FTTH network and IRUs backbone and backhaul, was increased to R$ 20 billion. Oi will be Infra Co's main customer and its value is associated with Oi's ability to remain competitive in fixed services when it comes out of judicial recovery;
- Inclusion of UPI TV Co including operations and customers of its DTH operation for a minimum price of R$ 20 million. The operation is losing economic viability, despite revenue of R$ 371 million in 2Q20, due to the rental cost in US$ of satellite capacity, in a contract with SES that runs until 2028;
- The Infra Co and TV Co auctions will be held in 1Q21. Oi intends to exit the judicial recovery in May 2022 and would keep as main assets the copper network and others associated with the fixed telephony concession;
- The debt with Anatel will be paid using the discount benefits provided in the interest established in Law No. 13,988.
Oi's ON shares appreciated 3.8% in the week and PN fell 1.6%.
Algar
- Algar's gross revenue grew 12.7% in 2Q20/2Q19, with B2B revenue growing 11.4% and B2C revenue 8.4%. B2B already represents 60% of Algar.
- The EBITDA margin reached 48.9% in the quarter and net income was R$ 85 million.
5G
- In order for Anatel to be able to carry out the 5G auction in the first half of 2020, the Council must approve the public notice until February. TCU needs 90 days to analyze the notice.
- Ericsson announced it has reached 100 commercial contracts in 5G, 56 of which are in operation.
More Highlights
- São Paulo released the installation of small cells in the city without the need for authorization from the city hall, requiring only registration. Big breakthrough.
- The auction for the sale of Sercomtel to be held this week (08/18) received a proposal from at least one interested party.
- GM has already sold 200,000 cars in Brazil with 4G, 65% of which have hired data plan for the vehicle. (Mobile Time)
- Disney confirmed the launch of the Disney + streaming service across Latin America on November 12th.
- Heats up the developers fight against the 30% tax on app sales charged by app stores. Apple removed the Fortnite game from its App Store after the company began offering the product for download at a 20% discount. Google also removed Fortnite from its Play Store.
Coming Week
- August 25th: Launch of the Internet Friendly Cities and Smart Cities Services Rankings (10 hrs)
- August 26th: 5G & Digital Transformation 2020
Oi, 5G and more
Eduardo Tude
Oi
- Vivo, TIM and Claro entered into an exclusive agreement with Oi to negotiate the pre-qualification offer of the R$ 16.5 billion for the acquisition of Oi Mobile as a “stalking horse”, thus guaranteeing the right to cover other proposals received in the auction. The Agreement is effective until Tuesday (August 11th).
- The exclusive agreement with Highline expired on March 8th, without the parties reaching an agreement. This does not prevent the company from making a new offer at the auction which should take place at the end of the year.
- The winner of the auction will have to wait about 1 year for the acquisition to be approved by CADE and Anatel, before completing the transaction.
- Before that, the amendment to the judicial recovery plan, which allows the sale of Oi Mobile, must be approved by the general meeting of creditors. It might be held in early September in person.
- The biggest opposition to the change in the judicial recovery plan comes from the Credit Banks, which complain about the treatment being given to the debt. The discussion is being led by a judicial mediator who is due to present a report this week with the outcome of the negotiations.
- Oi's ON shares fell by 14.3% in the week and PN by 17.8%.
- Oi announces its results for 2Q20 this week (August 13th).
5G
- 992 operators had launched 5G services in 38 countries in Jul/20, with 84 operators having launched mobile and 37 fixed services (FWA). (GSA)
- Huawei activated a private 5G network at its distribution center in Sorocaba for applications such as connecting mobile robots for logistical functions.
- T-Mobile US was the first US operator to activate the new 5G core on its network.
Other highlights
- Embratel made available four IoT connectivity plans with the CAT-M standard: 2 MB, 5 MB, 10 MB and 20 MB, with a maximum transmission rate of 1 Mbps and an average of 375 Kbps.
- American Tower announced the expansion of its fiber network, acquired from Cemig, to 15 new municipalities.
- Trump determined the blocking of transactions between American companies and Apps TikTok and WeChat from September 20th. Another initiative against globalization that now affects the global character of the internet.
This Week
- Oi reports its 2Q20 results (August 13th).
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).
