Is the presence in cell phones Oi/BrT's weakness?
In April/08 Oi announced takeover of Brasil Telecom, acquisition that depends on changing the General Concession Plan (PGO) and in the Anatel/CADE's approval, to become more effective.
After the acquisition approval, Oi/BrT might become one of the 3 major groups in the country, competing with the Telefonica/Vivo group for the leadership in gross revenues.
The position occupied by Oi/BrT may be, though, threatened as time goes by. Oi's revenue might increase less than the other group's due to the low participation of cellphone revenue in its total revenue.
The cell phone revenue in Brazil increased 19-8% in 2007, while the fixed (including broadband) raised 2,7%.
Oi/BrT's participation in the cell phone net revenue in Brazil was only 14.6% in 2Q08. Even by increasing as much as its competitors, the new operator will lose space in the total revenue, considering the small raise in the fixed revenue.
Oi/BrT would be the major group counting the number of fixed access in service and broadband, but it would be in disadvantage in cellphones and Paid TV.
Note that the major revenue concentration in fixed telephony doesn't give Oi/BrT profitability advantages.
In Latin America, as well, Oi/BrT would in disadvantage in cellphones, even though it would be the 3rd group telecom group in the region.
Million |
Telefonica Latin America |
A. Móvil/ Telmex |
Oi/BrT |
| Cellulars | 113 |
155 |
25 |
| Fixed | 24 |
25 |
22 |
| Broadband | 5 |
5 |
4 |
| Net Revenues (Millions US$) |
8,809 |
12,129 |
4,717 |
| Ebitda Margin | 34.6% |
42.0% |
32.60% |
| Cellular Revenue/ Total Revenue |
54.7% |
67.80% |
19.20% |
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