01/02/2014

Like in 2012, performance of the sector was only regular in 2013

 

The year of 2013 was considered as regular for 37% of the people who answered Teleco's annual poll. The result was similar to the one about 2012.

 

Great/Good and Bad/Very Bad got the same number of votes (31%). The years classified by people as Great/Good were left in the past.

 

 

 

 

The drop in the evaluation can be associated to the reduction in Brazilian mobile growth rate which is likely to reach 4% in 2013.

 

 

 

 

The fall in mobile net adds happens inside prepaid segment, so Brazil may end 2013 counting net adds between 10 and 11 million mobile accesses. Postpaid net adds will overtake prepaid for the first time in an year.

 

Note: The data about are projections made by Teleco

 

 

Mobile sales in Brazil are likely to remain at the same level of 2012's, encouraged by the growth of smartphones sales.

 

The net adds in wireline services (pay TV, fixed broadband and fixed telephony) also decreased along 2013.

 

 

 

By the end of the two digits growth in mobile telephony and slower growth of fixed accesses it gets more difficult to revenue to increase. The net revenue gotten by fixed and mobile carriers increased 4.7% considering the value accumulated in the first nine months of 2013, when compared with the same period of 2012.

 

In the first nine months of the year, TIM (7.3%) and América Móvil (7.1%) showed revenue growth superior to the inflation 5.7% projected for 2013 (IPCA). The same didn't happen at Telefônica/Vivo (2.6%) and Oi (2.2%).

 

The impact is felt also in operators' profitability. The EBITDA margin showed by operators in Brazil dropped from 30% in the first nine months of 2012 to 27% in the same period of 2013. All the six big carrier in Brazil showed reduction in this period.

 

In face of this scenario, the importance of data revenues increased, driving to a accelerate growth of mobile broadband with net adds reaching 34 million accesses, 1 million of them are 4G.

 

 

 

 

However, despite this growth, 2G (GSM) comprehends more than 60% of the Brazilian mobile accesses.

 

The six main groups of the sector presented the following highlights in 2013:

• Vivo insisted on its policy of turning off inactive accesses sooner than other carriers, driving to a reduction in its base inside this segment but that was made up for by the growth showed in postpaid. Inside postpaid segment, Vivo got net adds superior to the other three carriers altogether. Vivo was 4G leader (number of mobile access and cities covered). The company didn't get the same performance when we consider wireline services showing low growth in fixed broadband and pay TV.
• At América Móvil Group, there was good performance inside wireline services. NET reached the leadership in fixed broadband and Claro repeated the regular performance of the two previous years. It's expected for 2014 the merger of Claro, Embratel and Net.
• Oi lived another year restructuring the company by changing the president and merging with Portugal Telecom.
• TIM, having Rodrigo Abreu as new president, increased the focus in data growth.
• GVT continued to advance in its expansion plan, initiated operation in São Paulo Capital and ended the year covering 151 cities.
• Nextel didn't find the path to growth, despite of having intensified the sales of 3G plans in the end of the year.
• In 2013, Sky went through a readjustment of its base, turning off inactive accesses what drove to a smaller growth in the year.

 

Other highlights of 2013:

• The beginning of 4G operations in the country.
• Operators kept the level of investments in about R$ 25 billion in 2013 what helped to drive to a growth of 17% in the billing registered by the Brazilian Telecom industry, according Abinee's estimations.
• The operation of the "Sistema de Negociação de Ofertas de Atacado" (SNOA) one of the measures established by the PGMC.
• The approval of regulation for mobile paid systems in Brazil.
• The growth of participation of Telefônica Group at Telecom Itália caused a reaction of CADE so Telecom Itália may be obliged to sell TIM Brasil in the future.
• Value of TIM's stocks increased in 2013 (+48%), while Telefônica's (- 12%) and Oi's (-58%) lost value.
• MVNOs continued to increase in Brazil and the creation of PNBL 2.0 was left to 2014, despite the measures, like REPNBL, are already being executed.

 

To sum up, 2013 consolidated a new phase of the Brazilian telecommunication market, started in 2012, with smaller growth and operators increasing focus in broadband (fixed and mobile) which started to be the engine pulling revenue growth.

 

You could ask:

• Was 2013, a good year for Telecom in Brazil?
• What can we expect to 2014?
• What changed the competitive scenario in 2013? 4G? Nextel? MVNO? Mergers and acquisitions?
• Will operators keep the level of investments of 2012 and 2013?

• What the impact of the World Cup in the market performance in 2014?

 

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Click on: teleco@teleco.com.br Please let us know if you authorize the publication of your commentary.   Note: The opinions expressed in the published articles in this section are their authors' responsibility.

 

 

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