New record of investments in Telecom in Brazil during 2012
In 2012, Brazilian Capex can overtake the historical record of R$ 24.5 billion registered in 2001, when fixed telephony incumbents anticipated investments to be able to offer new services.
In these values aren't included investments to acquire frequencies, licenses to explore the service neither acquisition of other companies. It considers only Capital Expenditures - Capex.
Capex gotten in the 1st semester of 2012 (1S12) counted R$ 10.3 billion, holding growth of 24.2% over 1S11 and, is operators confirm the announced investments, Brazilian Capex of 2012 will reach R$ 25.7 billion.
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Companies usually use Capex as proportion of their net revenue or their EBITDA as one of the parameters to determine the annual level of investments.
The main Telecom groups in Brazil have kept Capex between 15% and 25% of their net revenue.
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At GVT, which is strongly expanding its network, Capex as proportion of net revenue has been superior to 50% in the past years.
Capex as proportion of Brazilian net revenue in the period from 2008 to the 1st semester of 2012 was, in average, superior than what was gotten by big operators such as AT&T, Verizon, Vodafone and France Telecom.
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Capex/Net revenue of América Móvil Brazil Group (Claro, Embratel and Net) was superior to América Móvil Group's (as a whole) in the last two years.
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At Telefônica/Vivo, Capex/Net revenue has followed the value registered by Telefonica Group in the world.
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The same happens when comparing TIM Brazil and Telecom Itália.
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Same results are gotten when we analyze Capex as proportion of Brazilian EBITDA.
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Telecom carriers in Brazil are keeping the high level of investments which is likely to be superior than R$ 20 billion by year in the coming years. Capex as proportion of net revenue and of EBITDA is a little above the international average, what indicates little room for a substantial growth of this level of investments kept the current conditions. Note that Capex doesn't include investments with acquisitions of frequencies, like the R$ 2.9 billion used in the 4G auction which took place this year.
On the other hand, Brazil faces the challenge of implanting a high speed band that requires investments in fiber access networks and mobile technologies like 4G.
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This comment is based on Brazilian Capex Report 2012 which keeps track of investment made by Telecom operators in Brazil.
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