Strong subscriber growth boosts Vivo’s 4Q profit

13 Feb 2009

Brazil’s biggest mobile operator by subscribers Vivo Participacoes has reported a sevenfold rise in fourth quarter net income on the back of stronger than expected subscriber growth and lower acquisition costs. In a regulatory filing the cellco, a 50:50 joint venture of Spain’s Telefonica and Portugal Telecom, reported net income of BRL215.5 million (USD94.2 million) for the three months to 31 December 2008, up from BRL28.3 million in the same period of 2007, on revenues which climbed 27% year-on-year to BRL4.27 billion. Vivo added a net 2.67 million new users in the final trimester, for a total of 45 million by the end of the year, adding that its strategic focus on targeting more profitable customers helped it spend 28% less in the period to lure them to its network. Vivo said though that blended average revenue per user (ARPU) dipped 6.4% y-o-y to BRL29.1 per month, reflecting a slowdown in the local economy – a situation which is expected to continue in 2009.