The total amount collected, if all the 5G bidding lots are sold, would be R$ 45,760 million, of which R$ 37,080 million in commitments and R$ 8,680 million in cash, corresponding to the minimum price (19% of the total).
The total value (Commitments + minimum price) for domestic lots would be:
- R$ 5.7 billion for 3.5 GHz;
- R$ 4.8 billion for 2.3 GHZ (50 MHz);
- R$ 3.9 billion for 2.3 GHz (40 MHz)
- R$ 2.2 billion for 700 MHz
- R$ 791 million for 26 GHz
The value of the regional lots would be proportional to the national ones according to the population distribution:
- North (8.72%)
- São Paulo (21.22%)
- Northeast (27.22%)
- Midwest (7.62%)
- South (14.27%)
- Rio de Janeiro+Minas Gerais+Espírito Santo (19.18%)
- Algar's Area (1.55%)
Source: TCU Report
For more details:
https://www.teleco.com.br/5g_licitacao.asp
The 5G initiative, which brings together 320 SCM providers and intends to form a consortium to participate in the 5G auction, intends to acquire spectrum in 700 MHz and 3.5 GHz.
5G: TCU Report
The technical area of the Federal Court of Accounts (Tribunal de contas da União - TCU) presented its report on the 5G auction. It is a technically solid report and difficult to be contested by Anatel.
The report also points out problems in the pricing of frequency bands, the main ones are:
- The model for calculating the net present value (NPV) of frequencies was based on the case of a new entrant and results in the economic viability of 5G at 3.5 GHz in only 60 of the 5570 Brazilian municipalities. The cost, depreciation, market share and revenue parameters used by Anatel are questioned.
- The use of criteria to define the minimum prices of regional lots proportional to the population that does not reflect the fair value of the range and commitments.
- The 26 GHz band, priced by international benchmarking, considered few countries and showed inconsistency in the use of purchasing power parity when comparing countries.
The report also points out several illegalities to be corrected in the notice, including the inclusion of the Private Network and the Integrated and Sustainable Amazon Program (Parents) and the non-inclusion of commitments to connect schools.
The Counselor reporting the process will present his opinion to the TCU Council on August 18th.
5G: Senacon
- The National Consumer Secretariat (Senacon) filed a lawsuit against TIM for misleading advertising for using the term "5G" in advertising campaigns, "even before the auction of the 5G frequency by Anatel take place".
- Senacon does not seem to be aware that 5G is already available in Brazil on a limited scale, sharing current frequencies (DSS) with 4G/3G.
Oi
When comparing 2Q21 with 2Q20, Oi's net revenue decreased by 3.5%:
- +3.5% in revenue from the residential segment, due to the growth in revenue from the fiber network, which exceeded revenues from the copper network.
- -10.6% in B2B
- -4.4% in mobile and DTH, which were considered discontinued operations.
Excluding discontinued operations, the new Oi's revenue was R$ 2.2 in 2Q21, with reduction of 2.6% in 2Q21/2Q20.
Routine EBITDA margin was 29.3% and the company posted net income of R$ 1.1 billion due to financial income from exchange rate variation. Investments of R$ 1.9 billion were 7.5% higher than in 2Q20. The net debt was R$ 25.7 billion.
V.tal, the infrastructure company that concentrates Oi's fiber network, reached the mark of 12 thousand homes passed with fiber (HP) in the quarter. Oi launched its fiber optic services in 27 cities in the last two months.
Anatel's Board approved the proposal for an arbitration agreement with Oi to address the imbalance in the fixed telephony concession.
Hi, Vivo, Claro and TIM sent to the Administrative Council for Economic Defense a joint statement responding to the Council's questions when the operation was declared complex.
Oi's ON shares showed losses of 6.1% and 0.5% of PN shares in the week.
Results 2Q21: Algar
Algar's net revenue grew 5.0% when comparing 2Q21 with 2Q20:
- + 11.3% in B2B which represents 63% of the total revenue.
- -4.1% in B2C.
Routine EBITDA margin was 41.8% and net income was R$ 48 million. Investments totaled R$ 137 million, the same amount as in 1Q21.
Results 2Q21: Unifique and Telebrás
- Unifique's net revenue grew 56.2% in 2Q21/2Q20 reaching R$ 106 million in the quarter. Net income was R$ 16.9 million.
- Telebras' net revenue grew 3.3% in 2Q21/2Q20 reaching R$ 66 million in the quarter. The loss was R$ 2.8 million in the quarter.
More Brazilian Highlights
- Bemobi announced the acquisition of M4U, which belonged to Cielo.
- Vitor Menezes, left the post of executive secretary of the Ministry of Communications, being replaced by Maria Estella Dantas Antonichelli, current chief of staff of the minister.
Coming Weeks
- Result 2Q21: Desktop and Brisanet (Aug. 16th)
- 5G & Transformação Digital 2021: Sep. 1s
Competitive Providers
- The eleven biggest Competitives providers ended the 2nd semester (2Q21) operating 4.3 million fixed fiber broadband accesses, more than Vivo (4.0 million) and Oi (3.1 million).
- Brasil TecPar announced the acquisition of NetSun Technology and Services, a Provider focused on Corporate Services in São Paulo.
- Desktop acquired Starnet Telecomunicações Ltda for R$ 51.5 million, R$ 26.1 million of which paid in cash and the remainder in five years. Starnet has 20,130 accesses and gross revenue of around R$ 30 million in the last 12 months.
- Unifique has completed the acquisition of Neofibra (4.3 thousand accesses) and Tkne (15 thousand accesses).
- The investment fund Bordeaux concluded the acquisition of Copel Telecom with the payment of R$ 2.5 billion to Copel.
- Anatel authorized the acquisition of Vogel Telecomunicações by Algar.
- Tely announced the entry into operation of a new underwater network from Bahia to São Paulo that allows a 25% reduction in latency on this route.
- Abrint was able to identify 526 locations served with backhaul by small providers (Competitives).
- Competitives stocks declined this week: Brisanet (-3.5%), Unify (-4.0%) and Desktop (-2.1%).
- News published by Uol and denied by the company, that Brisanet would have omitted the information that the company could be a target of the tax authorities of Paraíba, contributed to the fall in the shares of competitive companies.
Oi
- V.tal was the name chosen for InfraCo, the company that will bring together Oi's fiber assets.
- Oi's ON shares presented losses of 4.2% and PN shares of 3.2% in the week.
Norte Conectado
- The Workshop that presented the Qualification Process to integrate the Open Consortium of the Neutral Operator had about 100 participants.
- The documents (CARTA CONVITE, TR E ANEXOS ADC 10323) available in:
- https://www.rnp.br/sistema-rnp/fornecedores
- The deadline for inquiries is 08/12 and 08/27 for sending the Term of Acceptance and Commitment.
More Highlights in Brazil
- The Chamber of Deputies approved the final text of the MP that removes from the General Telecommunications Law the paragraph that allows the Executive Branch to regulate the participation of foreign capital in telecommunications companies. The matter now goes to presidential approval.
- Anatel and the Federal Revenue Service seized 20 thousand TV Box devices in the Port of Santos intended to illegally unlock pay TV channels.
Coming Weeks
- Results 2Q21: Oi (08/11), Unifique (08/13), Desktop and Brisanet (08/16)
- 5G & Transformação Digital 2021: 09/01
Telecom operators continued to show low revenue growth when compared to OTTs.
Results 2Q21: Vivo
When comparing 2Q21 with 2Q20, Vivo's net revenue grew 3.2%:
- +5.6% in mobile revenue, of which 3.1% in service revenue and +47.3% in handset revenue.
- +6.2% in fixed broadband (+14.4% in corporate data and IT).
- +4. in Pay TV.
- -17.3% in Fixed Telephony.
EBITDA margin reached 39.7% and the net income R$1.345 million. Investments of R$ 2,251 million were 17.9% higher than in 2Q20.
Vivo can evaluate the acquisition of competitive providers through its subsidiary FiBrasil.
Results 2Q21: TIM
When comparing 2Q21 with 2Q20, TIM's net revenue grew 10.5%, being:
- +10.5% in mobile revenue, with +8.5% in service revenue and +130.5% in handset revenue.
- +11.1% in fixed services revenue, which represents 6.4% of TIM's revenue.
The EBITDA margin reached 47.7% and the net income R$ 681 million. Investments of R$996 million were 34.6% higher than in 2Q20
TIM is substituting copper connection for fiber in the last meters of its FTTC fixed broadband network.
TIM and Banco C6 started an arbitration procedure that could lead to the end of the partnership between the two companies.
Smartphones
- Samsung maintained its leadership in smartphone sales worldwide in 2Q21 (59 million), followed by Xiaomi (53.1 million), Apple (44.2 million), OPPO (32.8 million) and Vivo (31.6 million).
- 313 million smartphones were sold in 2Q21, 13.2% more than in 2Q20. (IDC)
- In Brazil, the installed base of smartphones has the following distribution: Samsung (43%), Motorola (22%), Apple (13%), Xiaomi (10%) and LG (7%). (Panorama Mobiletime/Opinion Box)
Mobile Telephony in June
- Claro led cellular growth in June (535 thousand), followed by Vivo (526 thousand) and Oi (488 thousand). TIM presented negative net adds in the month (-166 thousand).
- Claro led in postpaid net additions (435 thousand) and Oi led in prepaid net additions (228 thousand).
- Cell phone base in Brazil presented net adds of 1,456 thousand mobile accesses in June, if Algar, which did not disclose its number of cell phones this month, is not considered.
Fixed broadband in June
- Oi presented positive net additions (20.1 thousand), while Claro (-18.3 thousand) and Vivo (-20.7 thousand) presented negative net additions.
- The number of accesses operated by the Competitives disclosed in May by Anatel was corrected by 945 thousand accesses. The value presented for June is underreported, being 1.2 million less than that of May. In May 6,534 providers reported accesses to Anatel and in June 5,951.
- Competitives had net adds of 147 thousand accesses in June, if only those that reported accesses in the 2 months (May and June) are considered.
- In the accumulated result for the year until May, Competitives presented net additions of 2.0 million accesses and Oi 90.7 thousand. Claro (-51.5 thousand) and Vivo (-35.2 thousand) presented negative net additions.
- Pay TV lost 132 thousand subscribers in the month and fixed telephony lost 211 thousand wirelines.
IPOs and Acquisitions
- Brisanet debuted on the stock exchange, after raising R$ 1.25 billion with its initial public offering (IPO). Unifique had raised RS 818 million and Desktop RS 725 million.
- MHNET announced the acquisition of Qnet Telecom and Toledonet and Zuknet Networks and plans to go public in the coming years.
- Lumen (Centurylink) sold its operation in Latin America, including Brazil, to Stonepeak for US$ 2.7 billion.
Norte Conectado
Oi
- The statutory period for CADE to analyze the sale of Oi Móvel, now classified as a complex operation, is now 240 days, extendable for another 90 days, as of the publication of the notice on March 31st, 2021. In other words, by the end of year or beginning of 2022.
- Oi priced at US$ 880 million the offer in the international market of debt securities (senior notes) to be issued by Oi Móvel.
- Oi intends to supply fiber to over 75 cities by the end of 2021, totaling 208 cities with FTTH.
- Oi's ON shares showed losses of 3.3% and ON of 5.1% of PN in the week.
5G
- Sindisat filed a lawsuit in the Federal Court of Brasília seeking compensation for satellite operators that operate in the extended C band (3,625 MHz to 3,700MHz) which will be resumed by Anatel in the 5G auction. The action does not intend to interrupt the bidding process for frequencies for 5G, but seeks compensation to be calculated by an independent expert.
More Brazilian Highlights
- Embratel's Star One D2 satellite was successfully launched and placed into orbit.
- Globo sold its Data Center in Rio de Janeiro to Piemonte Holding.
Coming Weeks
- Results 2Q21: Oi (Aug. 11th)
- 5G & Transformação Digital 2021: Sep. 1st
