How to increase Telecom investments in Brazil?
In the first semester of 2013 (1S13), investments of Telecom operators in Brazil totalized R$ 11.2 billion, 8.5% more than in 1S12.
These values don't include investments in frequencies acquisition, licenses to explore service or acquisition of other companies. It counts Capital Expenditures (Capex) only.
This growth occurred in most of the companies, except at Vivo and TIM.
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Investments in fixed (access and backbone) and mobile broadband (3G and 4G) have resulted in a record growth of Capex in Brazil.
In 2012, it reached R$ 25.7 billion (US$ 13 billion), overtaking in nominal values (not considering the inflation) the R$ 24.5 billion of 2001, when the fixed telephony incumbents anticipated investments in order to start offering new services.
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Teleco projects for 2013 a level of investment close to 2012's.
Operators Capex has represented 20% of their net revenue and overtook 70% of their EBITDA in the last 12 months (1S13).
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* 12 months
Those are high levels, superior to the ones found in the main operators around the world in the last 2 years.
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These indicators show that there is no room to apply a substantial elevation in the investments level, kept the current condition. Note that in Capex aren't included the investments with acquisitions of frequencies, such as R$ 2.9 billion paid in the 2.5 GHz auction to 4G and 700 MHz auction that will take place in 2014.
On the other hand, a challenge is being faced in the whole country to implement high speed broadband which requests big investments in fiber access network and mobile technologies such as 4G. It's about building an essential infrastructure to develop Brazil.
The exemption of PIS/Cofins and IPI associated with a infrastructure project to give support to REPNBL broadband contributes to amplify the scope of these investments. Sharing network is another initiative that comes from operators. The depreciation of Real may increase the cost of equipments.
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This commentary is based on Capex in Brazil 2013 Report which monitors Telecom operators investments in Brazil.
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