Teleco has surpassed 50 thousand followers on Linkedin this week. Thanks to everyone who follows us in these 17 years of the portal Teleco.
Oi
- Oi's investments in Jul/19 reached the highest value since the beginning of the Judicial Recovery process. With the R$ 702 million invested in July, Oi accumulates R$ 3.9 billion of investments in the first seven months of the year;
- On the other hand, the final balance of Oi's Financial Cash had retraction of R$ 524 million in July/19, totaling R $ 3,621 million;
- Oi's Board of Directors elected Rodrigo de Abreu to assume the position of Statutory Officer, with the duties of Chief Operational Officer (COO), reporting to the Company's CEO;
- Information was circulated in the press, not confirmed by the operators, that Oi would have talks with Telefônica and TIM about a possible sale of its mobile operation; (TeleSintese)
- Oi's ON stocks presented losses of 1.0% in the week while PN raised 1.3%.
SeAC (Pay TV)
- Brazilian Senate Science and Technology Commission has again postponed the vote on Law Project 3.832/2019, which changes the SeAC law. The situation seems to be heading towards the approval of the project by removing only restrictions on cross-ownership between telecom operators and content producers, which would prevent AT&T having to scrap SKY.
IoT
- Vivo has put NB-IoT and LTE-M connectivity technologies into operation in 400 municipalities and intends to take these technologies to all 3,700 municipalities currently served with 4G (LTE) by the beginning of 2020.
Sercomtel
- Sercomtel's privatization plan is advancing with the stock auction scheduled for December. Anatel has approved the bid for the operations associated with mobile, fixed broadband and long distance fixed telephony authorizations, which must now be analyzed by Federal Court of Auditors;
- The forfeiture process of Sercomtel's local fixed-line concession is suspended while Federal Court of Auditors is reviewing the bidding notice.
Other highlights
- The Senate Economic Affairs Committee (CAE) has approved a Law Project that allows the use of FUST funds to ensure mobile coverage in 100% of Brazilian districts with populations of over 1,000 inhabitants. The text goes to the Commission of Science, Technology, Innovation, Communication and Informatics (CCT), where it has terminative procedure; (TeleSynthesis)
- Anatel approved public consultation on the revision of the PGMU IV Universalization Obligation Regulation;
- Algar's board directors approved its ninth issue of debentures, in the amount of R$ 350 million. The sale of the bonds will take place on October 10th; (TeleSynthesis)
- The Mobile Time/Opinion Box Survey in Brazil points out that:
- 26% of Internet users have control plans and 29% postpaid. Prepaid would represent 55%;
- 98% of smartphones in Brazil have WhatsApp installed, with 65% making voice calls and 53% video.
Coming week
- This week, I'll participate of the 5G Core Summit 2019 in Madrid.
Approval of Law Project 79
September 11th became a milestone for Brazilian telecommunications. Law Project 79 was unanimously approved by the Committee on Science, Technology, Innovation, Communication and Informatics (CCTCI) and the Senate plenary on the same day. Now the project goes to presidential sanction.
It has been almost 5 years of efforts for a bill that has united the entire telecommunications sector in Brazil since the project was presented in Oct/2015 in Camara by Dep. Daniel Vilela.
Law Project 79:
- It clearly defines reversible assets, bringing legal certainty to companies and to Anatel's action;
- Makes it possible to terminate fixed telephony concession contracts before 2025, turning fixed telephony spending into broadband investments;
- It establishes the possibility of transferring the right of use of frequencies between providers, optimizing the use of these increasingly scarce resources.
Now Anatel's arduous task is:
- Estimate the value of concessionaire obligations and reversible assets;
- Define the broadband investment commitments corresponding to this amount.
It's important to remember that under the law “Investment commitments will prioritize the deployment of high-capacity data communication network infrastructure in areas without adequate competition and the reduction of inequalities”. Brazilian Ministry of Science, Technology, Innovations and Communications and Federal Court of Auditors will have to be heard in this process.
Oi
- The approval of Law Project 29 is good news for Oi. The definition of reversible assets brings legal certainty to the operator and should allow it to sell non-essential assets such as office buildings;
- Standard & Poor's announced a review of the credit rating assigned to Oi, maintaining long-term global scale rating at B, but reducing the outlook from Stable to Negative as well as reducing the national scale from brA to brA-;
- Oi's ON stocks presented losses od 11% in the week and PN of 3.8%.
SeAC (Pay TV)
- The vote in the Senate Commission of Science, Technology, Innovation, Communication and Informatics for the Law Project 3.832/2019, which changes the SeAC law, was postponed until next week. There seems to be consensus on lifting restrictions on cross-ownership between telecom operators and content producers, which would prevent AT&T having to scrap SKY;
- More controversial is the issue of considering the distribution of linear programming channels over the Internet with value-added service and not SeAC, if approved, would create a competitive imbalance with pay-TV operators that are subject to a higher tax burden and obligations such as national content quotas, must carry and Anatel regulations;
- Meanwhile, in the US, the Elliott fund bought 1.21% of AT&T shares for US$ 3.2 billion and issued a document criticizing the purchase of Time Warner and proposing the sale of DirecTV and SKY in Brazil;
- Comcast and a number of cable developers are suing the state of Maine to block a law requiring cable TV providers to sell a la carte channels;
- Ancine has submitted for public consultation its Regulatory Impact Analysis for the video on demand (VoD) market. The document addresses issues such as taxation and the promotion of national content.
5G and IoT
For IoT Analytics, the main uses of 5G IoT will be:
- Vehicle telematics;
- Vehicle Information & Entertainment;
- Smart Grid Management;
- Mobile and collaborative robots;
- Public video surveillance and security;
- Cooperative Mobility;
- Smart urban mobility.
In Brazil, 4G applications for vehicles advance:
- GM's new Onix car will come with native Wi-Fi and a 4G connection provided by Claro. The first three months of access are free;
- And Vivo launched the Vivo Car that enables the car as a mobile Wi-Fi hotspot.
Huawei has stated that it would be willing to sell access to its 5G technologies to a company based outside Asia, with the buyer free to modify key elements and block access to the created products.
Other highlights
- The Administrative Council for Economic Defense (Cade) approved, without restrictions, the purchase of Nextel by Claro. Anatel's approval is now awaited;
- Anatel has placed in public consultation the taking of subsidies for the "regulatory guillotine", which aims to identify agency regulations unnecessary to regulate the sector;
- A coalition of 50 attorneys general from 48 US states has launched an investigation into Google's business practices to determine whether they violated competition law;
- Apple released the iPhone 11 with prices slightly lower than last year's releases, which came as a surprise to consumers.
Coming weeks
- Telco Transformation LATAM will take place in Rio de Janeiro
Abandonment of the 2nd chip
- The data from the Household ICT survey confirm the trend of abandonment of the 2nd chip by those with cell phones. In 2015, 30% of people 10 years old and older who owned a mobile phone had 2 or more chips. This share fell to 22% in 2018;
- The number of chips used by mobile phones (excluding data terminals) fell from 241 million in 2015 to 207 million in 2018.
Law Project 79 and Oi
- Law Project 79 may be approved on a terminative basis at the Senate Science, Technology, Innovation, Communication and Informatics Commission this week. It will have to go through the plenary only if a petition is submitted by a minimum number of senators;
- We will be back to December 2016, when the Law Project 79 was finally approved by the Senate CCTCI. It will be almost three years lost;
- The court authorized Oi's Board of Directors to elect a company COO. Rodrigo Abreu is the most likely name to fill the position. According to information, he would assume the presidency of the company until the end of the year;
- Oi confirmed that "it has received several financial institutions and other stakeholders to discuss fundraising alternatives";
- Oi's ON shares lost 0.84% in the week and the PN 3.66%.
Pay TV
- Law Project 3.832/2019, which removes restrictions on private ownership under the SeAC Law, enabling unrestricted approval of acquisition of Time Warner by AT&T, might by analyzed by the Senate CCTCI this week;
- The project has provoked great debates regarding the possibility of dealing also with the issue of the distribution of linear channels over the Internet;
- Meanwhile, Anatel's Board extended for up to 120 days the deadline for Board Member Moisés Moreira to review Time Warner acquisition by AT&T, enabling Law 3.832/2019 to be approved prior to issuing its opinion.
Other Highlights
- Vivo has launched its private 4G network service, which includes the construction of a mobile network dedicated to customer. Private networks for industries are one of the target segments for 5G application;
- TIM announced eSIM (Virtual Chip) support for smartphones compatible with this technology;
- Claro registered an increase of almost 30% in the combined sale of services in the first month of unification of the NET brand with the Claro brand;
- Cade approved the formation of the joint venture between Hughes and Yahsat to offer satellite broadband;
- American Tower's LoRaWAN network for IoT in Brazil has daily traffic of 7 million messages and covers 112 cities;
- In Brazil, electronic payment transactions through Smartphones (29 billion) and internet banking (21.9 billion) accounted for almost 70% of total transactions in 2018 (Brazilian Central Bank);
- Samsung has announced new products for the Brazilian market, including the Galaxy Note 10 and Note 10+, which should be manufactured in Brazil;
- Brazilian Superior Court of Justice decided that there is no employment relationship between driver and individual passenger transport application company. The driver is a self employed.
Net additions in July
Net additions of the main telecom services maintained in July the trends presented in the first half of 2019:
- The postpaid base continues to grow (+629 thousand accesses) and the prepaid base shrinking (-435 thousand). Part of the postpaid growth is due to M2M (392 thousand) and part to the prepaid migration (237 thousand). The total mobile base has grown again thanks to M2M. Claro led postpaid net adds (+288 thousand) and Vivo in M2M (+153 thousand);
- Net additions of fiber accesses (+367 thousand accesses) offset losses with xDLS accesses (-216 thousand) leading to net additions of 89 thousand fixed broadband accesses in the month. The competitive ones led the growth of fixed broadband in the month (+178 thousand) and Vivo (-44 thousand) and Oi (-49 thousand) presented losses;
- Pay TV (-171 thousand accesses) and fixed telephones (-234 thousand) continued to show losses.
Internet users in Brazil
- According to the ICT Households survey, 70% of the Brazilian population over 10 years old were internet users in 2018 (126.9 million people). Age is the main factor for greater internet penetration. Only 34% of people aged 60 and over are internet users. In the range of 16 to 34 years old this participation is over 90%. Income seems to have a lower weight: 62% of those earning less than 1 minimum wage are internet users.
Oi
Two good news helped Oi recover some of its stock value during the week:
- Law Project 79 rapporteur, Senator Daniella Ribeiro, finally presented her opinion on the matter, with only one amendment allowing the concession to be renewed for several periods;
- The AT&T sign that might be interested in acquiring Oi if SeAC Law is changed by eliminating barriers to cross-ownership. This would prevent AT&T from having to dispose of SKY.
Oi's ON shares raised 48.75% in the week and the PN 27.1%.
5G
- Counselor Aquino, rapporteur of the 5G frequency auction process, stated that the publication of the edital will be delayed due to the debates over the interference of 5G in 3.5 GHz band that is used by satellite dishes for reception of open TV;
- Algar Telecom conducted its first tests with 5G technology in the 3.5 GHz band together with Huawei and the Federal University of Uberlândia's Faculty of Computing (UFU);
- Teleco held the 3rd edition of its online event 5G & Digital Transformation. You can watch the presentations at:
- https://telecomwebinar.com/5g-e-transformacao-digital-2019/
Other Highlights
- Information services GDP increased 0.5% in 2Q19, compared to 1Q19, more than Brazilian GDP, which grew 0.4%. Comparing the last four quarters with the previous four quarters, Information Services GDP raised by 2.6% and Brazil GDP by 1.0%;
- Economist Marcos Ferrari will take over on September 9th the executive presidency of SindiTelebrasil, succeeding Eduardo Levy, who has been in charge of the entity since 2010.
