Brazil’s largest fixed line operator by subscribers, Oi (formerly Telemar), reported net profits of BRL637 million (USD364 million) in the three months to 30 September 2007, up 136% year-on-year from BRL270 million in 3Q06. The telco posted revenue of BRL4.44 billion, up 2.9% from BRL4.31 billion a year ago, while EBITDA was BRL1.91 billion (+23%) and the EBITDA margin was 43%, from 36% a year earlier. CAPEX for the three-month period totalled BRL572 million compared to BRL618 million previously, of which 82.2% was spent in the fixed line segment. Oi has operations in 16 of Brazil’s 27 states, including Rio de Janeiro and Minas Gerais. It is looking to position itself as a quadruple-play operator now that the regulator Anatel has approved its acquisition of Minas Gerais-based cableco Way TV.
Oi is looking to invest approximately BRL800 million in the fourth quarter, with a particular focus on the broadband segment, company CFO Jose Luis Salazar said in a conference call. The capital expenditure accounts for around 40% of the company’s total spend for 2007, which is expected to hit BRL2.1 billion rather than the previous forecast of BRL2.4 billion. Oi expects to end 2008 with broadband coverage of 400 cities compared to 220 today, the executive added.
At the end of September, Oi had 14.3 million fixed lines in service, down 0.8% on the same time last year, although this was offset by a 17.9% rise in mobile subscribers in the same period, to 14.9 million. Meanwhile, the operator’s broadband service Velox reported a 33.2% rise in customers to 1.4 million at the end of the period. Broadband ARPU was BRL50.1, down from BRL56 in 3Q06.
‘For the first time, the number of clients in the mobile segment exceeded the number of fixed telephony subscribers,’ said Salazar. Oi’s blended monthly mobile ARPU was BRL22.3 compared to BRL22.4 in the third quarter of 2006. Oi’s mobile unit is interested in participating in auctions for 3G spectrum, scheduled for 18 December and is still refining its investment plans for 2008 as it weighs up the likely investment in 3G, Salazar said.