Which is the biggest Telecom Group in Brazil?
In the first quarter of 2010 (1Q10), Oi presented the highest gross revenue (R$ 11.5 billion) among the telecommunication groups in Brazil. However, the company was surpassed in net revenue by the Telefonica/Vivo group.
This result can be explained by the fact that Telefonica/Vivo and Claro/Embratel/Net groups had released their results based in new accounting patterns based in IFRS. Oi continued to adopt the old patterns. In 2011 all the companies will have to release results using the new rules.
In other words, the revenue standard doesn't permit us to see clearly which Telecom group was the biggest in 1Q10. In 2009, with all companies using the same accounting pattern, Telefonica/Vivo group presented gross revenue of R$ 46 billion against Oi (R$ 45.7).
Telefonica/Vivo group leads in the number of accesses (68.4 millions), followed by Oi (62.2 millions) and by Claro/Embratel/Net group (59.5 millions).
Oi presented the highest EBITDA margin in 1Q10 (33.9%). On the other hand, the company made the smallest investment in the period. Besides, Oi shows the highest debt among the three groups.
| R$ millions | EBITDA Margin |
Profit |
Investment |
Net Debt |
| Oi | 33.9% |
496 |
237 |
21,270 |
| Telefonica/Vivo | 31.4% |
595 |
686 |
4,749 |
| Claro/Embratel/Net | 30.4% |
317* |
428* |
1,998* |
| *It doesn't include Claro |
Oi is the only group to have an integrated operation of all its services, what gives the company an advantage over other operators, that, however, can be temporary.
Embratel/Claro/Net group is promoting the incorporation of Embratel and Net by América Móvil (Claro's controller). This is an important step for the merger of these three companies in Brazil. It's good to remember that the merger with Net still depends on legal matters, in particularly the approval of the Proposed Law 29.
Telefonica made an offer for Portugal Telecom's part in Vivo, aiming the integration. The offer was refused, but Telefonica is likely to insist on the search for an integrated operation.
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