Group formed by Claro, Embratel and Net focus in profitability
Over the last 12 months, the group composed by Claro, Embratel and Net focused on improving its profitability.
During this period, group's EBITDA increased 23.9%, while net revenue increased 6.8%.
As consequence, group's EBITDA margin raised from 26.2% in 1Q09 to 30.4% in 1Q10.
In the first quarter of 2010 (1Q10), the group reached net revenue of R$ 6.8 billions and EBITDA of R$ 2.1 billions.
Source: Operators
Claro was responsible for most of the revenue (40.9%) and EBITDA (42.6%). The company had also the highest EBITDA margin of the group with 31.7%, against 29.6% (Embratel's) and 29.3% (Net's).
The improvement in Claro's profitability was followed by a lower growth compared with 2007 and 2008, when the company led mobile growth in Brazil in net adds.
The Group closed 1Q10 with 59.5 million accesses, 77% of those were Claro's cellulars.
| Accesses (millions) | 1Q10 |
∆Year |
| Cellulars | 45.6 |
15% |
| Fixed and Fixed Broadband | 9.7 |
17% |
| Pay TV | 4.2 |
25% |
| Group | 59.5 |
16.0% |
The highest growth happened in Pay TV, due to Embratel breaking into DTH conquering 410 thousand new accesses during the period of one year. Net's Pay TV accesses increased 12.8% along this period.
In fixed telephony and broadband, the opposite happened. While Embratel's accesses increased 6.3%, Net Fone raised 29.3% and Net's broadband accesses 21.9%.
The synergy between Embratel and Net is increasing. Embratel has 37.9% of Net's ON stocks (which give right to vote). The changes in the law suggested in the PL 29 (Proposed Law), which is being analyzed by the Brazilian Congress, will make possible a merger of both companies.
On the other hand, there are no legal obstacles against the creation of an integrated company for fixed and mobile telephony, as the merger between Claro and Embratel. So, Carlos Slim's decision of promoting the incorporation of Telmex International (Embratel's controller) by América Móvil (Claro's controller) can accelerate this process.
América Móvil's revenue increased 9.8%, in the comparison between 1Q10 and 1Q09, and EBITDA raised 12.4%. EBITDA reached 42.8% in 1Q10.
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