27
9/2020

Growth in 3Q20, 5G and more highlights

Eduardo Tude

Growth in 3Q20

This week ends the 3rd quarter and Anatel will report the accesses growth in August. It will be possible to confirm whether the trends observed in July will continue in the remaining months of the year:

  • Will Cellular grow in the quarter? Will prepaid present smaller losses?
  • Will postpaid (without M2M) grow in 3Q20, reverting the fall registered in the previous quarter?
  • Will fixed broadband continue to grow?
  • Will pay TV losses be smaller in 3Q20?
  • Which operator will present the best performance in the quarter?

 

5G

  • The tests of filters to attenuate the interference of the 5G signal in the reception of open TV via satellite at the frequency of 3.5 GHz should be concluded this week;
  • In Jun/20 there were 138 million 5G mobile phones in the world, with more than 100 million in China and 8 million in Korea. The US had about 1.2 million;
  • Verizon sponsored an interesting documentary that seeks to answer the following question: Who needs 5G?

https://youtu.be/-skSxqp7Heo

 

Oi

  • Highline (Digital Colony) continues to be interested in Oi Mobile;
  • Itaú and Caixa Econômica Federal have asked the court to declare the General Meeting of Creditors null and void against the 55% cut in the debt amount. The BNDES, on the other hand, does not want the Judicial Reorganization to end before the liquidation of all the operator's debts is settled, having also filed a lawsuit against setting a closing date for RJ;
  • Oi's ON shares lost 3.3% in the week and PN 4.9%.

 

More Highlights

  • Vivo put its FTTH network into operation in 18 more cities, 10 in the state of São Paulo, with 253 cities with FTTH and 13 million home passed;
  • The most widely used paid video streaming services in Brazil are Netflix (86.6%), Amazon Prime (40.2%), Globoplay (25.5%), Telecine Play (18.6%) and HBO Go (14.3%). Source: Nielsen and Toluna;
  • Huawei will install twelve laboratories in the country to train fiber optic installers. The demand was identified from a study conducted by Teleco for Huawei;
  • The GSMA changed from February to June 2021 the date of the Mobile World Congress, held in Barcelona, next year;
  • Deutsche Telekom and Vodafone intend to shut down their 3G networks in Germany on June 30, 2021, to free up the spectrum for 4G and 5G. Telefonica plans to do the same in Germany in late 2022.

 

Coming Week

  • Sep. 29th – Painel Telebrasil – Last day

 

 

20
9/2020

M&A, Streaming, Oi and other highlights

Eduardo Tude

M&A

  • América Móvil announced the sale of TracFone, its MVNO in the USA, to Verizon for US$ 6.25 billion, about R$ 32.5 billion, twice as much as what is being offered by Oi. TracFone is a prepaid operator with 21 million cell phones, less than Oi's 37 million, but which has an ARPU (US$ 28) nine times higher than Oi's (R$ 16). Note that, in the case of Oi mobile, the buyer is also acquiring frequencies and the network, which is not the case with TracFone, which does not have these assets because it is an MVNO;
  • Copel will publish the auction notice for the sale of Copel Telecom on Monday. The minimum price is R$ 1.401 billion and the auction should take place on November 9th;
  • Nvidia closed a deal with SoftBank to acquire chip maker Arm for US$ 40 billion;
  • Ericsson announced the acquisition of Cradlepoint for US$ 1.1 billion, aiming to capture a larger share of the 5G corporate market.

 

Streaming and Pay TV

  • Like Anatel, Ancine decided that the linear programming offer over the internet is not a Conditional Access Service such as Pay TV;
  • In face of this understanding, Claro will launch a streaming service for TV channel packages in the coming weeks, and is therefore characterized as a value-added service;
  • As value-added services, these services would not have to comply with national content quotas and would have a tax burden of around 8% less than the 20% of pay TV. A draft legislative decree was presented to Congress to block this decision by the agencies. Congress urgently needs to review the SeAC law to avoid this imbalance.

 

Oi

  • The Final Balance of Oi's Cash Flow grew by R$ 768 million in Jul/20, totaling R$ 5,639 million. Investments reached the level of R$ 520 million in the month;
  • Oi's extraordinary shareholders' meeting, scheduled for last week, did not occur due to a lack of quorum. The objective was to extend the term of the current members of the board of directors until the 2021 annual general meeting;
  • Oi's ON shares appreciated by 10.4% in the week and PN by 1.2%.

 

More highlights

  • The General Data Protection Law (LGPD) came into force, with the publication in the Official Gazette of Law 14.058/2020;
  • CenturyLink announced the change of its name to Lumen Technologies. The new name signals a reorientation of efforts to provide a combination of platforms and other resources to support applications in the era of Industry 4.0.

 

 

 

6
9/2020

Fiber, Oi, 5G and more highlights

Eduardo Tude

Highlights of accesses in July: Fiber and postpaid

  • More than 50% of fixed broadband accesses in Brazil are contracted with speeds above 34 Mbps. Fiber accesses are largely responsible for this growth;
  • Oi grew again in fixed broadband (+18.7 thousand), which didn't occur since Jul/2017. In this period, Oi lost 1.5 million accesses. Fiber investments are beginning to pay off. The growth in fiber accesses in July (+154 thousand) was greater than the losses with xDSL (-135 thousand);
  • The migration from prepaid to postpaid has reoccurred, leading to a growth in the cellular base in Brazil. The growth was actually greater because Datora, which has about 580 thousand postpaid, did not report their cell phones in July.

 

Oi

  • This Tuesday (September 8th) the Creditors' General Meeting will be held virtually, which should approve the amendment to the judicial recovery plan;
  • Oi hired the BTG Pactual bank to prospect investors interested in the acquisition of its pay TV (DTH) business;
  • Oi's ON shares appreciated by 7.0% in the week and PN by 20.8%.

 

5G

  • Samsung presented the first two 5G smartphones to be launched in Brazil: the Galaxy Note 20 5G (R$ 6,500) and the Galaxy Note 20 Ultra 5G (R$ 8,000);
  • Senai-SP inaugurated an industry 4.0 laboratory that will have a private LTE network provided by Nokia;
  • Three Hard Rock hotels in Brazil, which will open in 2021, might have 5G coverage provided by QMC Telecom;
  • Telefónica plans to cover 75% of Spainish population with its 5G network by the end of the year.

 

More Highlights

  • The information services GDP, in which Telecom represents the majority, grew 1.8% in 2Q20, in the comparison of the last four quarters with the previous four quarters. More than the Brazilian GDP, which fell by 2.2%;
  • Anatel's Board will hold an extraordinary meeting on Wednesday (Sep. 9th) to discuss the framework of linear channels on the Internet;
  • The Ministry of Communications launched the North Connected Program. The first stretch of river fiber optic backbone will connect Macapá to Santarém;
  • Unifique and MHNET partnered to act as MVNOs (Stay Mobile) in the southern region of the country;
  • The decree regulating the Antenna Law was published. The decree establishes a maximum period of 60 days for issuing licenses and regulating the "Direito de Passagem" (right to use public area) for the construction of networks;
  • The main telecom operators paid Fistel, Condecine and CFRP fees this week;
  • Anatel sent to TCU the survey of reversible goods prepared by the operators;
  • 78% of all U.S. households subscribe to a streaming service from Netfix, Amazon Prime and/or Hulu. This percentage reached 69% in 2018 and 52% in 2015. (Leichtman Research Group)

 

Coming Weeks

 

 

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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