Oi didn't focus on growth but on profitability in 2010
In March 2010, Teleco's commentary (more details) showed Oi's dilemmas for 2010, presented in the following image. The results gotten in the 3rd quarter of 2010 (3Q10) left no doubt about Oi's choice for profitability, instead of growth and market share in 2010.
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In 2010, Oi presented reduction in its cellular, fixed and broadband net adds, when compared to the same period of 2009.
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Comparing the 9 first months of 2010 with the same period last year:
Consequently, in 2010, the company lost market share in these 3 services.
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In cellular, Oi lost the market share leadership in Region I, being overtaken by Vivo and later by Tim.
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On the other hand, Oi's profitability improved a lot in 2010, with EBITDA margin increasing 37% in 3Q10 and profit reaching more than R$ 400 million in all the quarters.
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In 2010, investments were also reduced. In the first 9 months of the year, these investments were 55.5% smaller than in the same period of 2009. Net debt made up for it by falling 8.6% in comparison with 3Q09.
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Oi's option for low growth/investment strategy in 2010, focusing in the generation of cash flow and profitability won't change in the last quarter of 2010.
This strategy contributed for the drop in Telemar's value cap from R$15.9 billion in 2009 to R$10.4 billion in Sep/10.
However, Oi is signaling with a new strategy for 2011, resuming growth/investments in broadband and mobile service. Portugal Telecom's entrance at Oi, approved by Anatel on 10/29/2010, reinforces this possibility.
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