Oi, Telesp reveal details on 2011 investment

8 Jun 2011

BNamericas reports that Brazilian telecoms operator Telemar Norte Leste (TNL), which markets fixed and mobile services under the Oi banner, has revealed plans to invest BRL4.5 billion (USD2.85 billion) in 2011 with a specific focus on the country’s cable TV market. Oi reported a net loss of BRL395 million in the first three months of this year, reversing net profit of BRL518 million in Q1 2010. The company attributed the results to the negative impact of BRL600 million in one-time items related in the main to financing and provisioning. TNL booked revenues of BRL6.93 billion in the period under review, down 7.1% year-on-year, attributable to intense sector competition which forced it to extend discounts in order to keep pace with rivals. The operator closed out March with 66.043 million RGUs, up 6.1% year-on-year and up 3.3% quarter-on-quarter, boosted by its mobile division where mobile subscribers increased 13.3% to 41.472 million. Oi said it added a net 2.20 million new mobile users in 1Q11. Further, Oi’s broadband user base increased 5.8% y-o-y to 4.513 million (first-quarter net adds reaching 159,000), of which 14% of users were hooked up to a connection of 4Mbps or higher.

In a separate development, fellow Brazilian telco Telecomunicacoes de Sao Paulo (Telesp), which is backed by Telefonica of Spain, has said it is looking to invest BRL200 million in its fibre-optic infrastructure in Sao Paulo this year, as it looks to extend fibre across the state. Unconfirmed sources claim that the Japan Bank for International Cooperation (JBIC) has signed separate ‘untied’ loan agreements with Telesp and Oi totalling USD420 million for each company’s network expansion.

TeleGeography’s GlobalComms Database writes that in March this year, Telefonica announced it was increasing its capital expenditure outlay in Brazil for the period 2011-2014 by 52% over the previous four-year period to USD14.6 billion to cater for an anticipated surge in demand for telecoms services in the LatAm region’s biggest economy. The sum includes monies to fund possible acquisitions and operating licences, it said in a statement at the time, and eclipses the BRL16 billion it spent in Brazil between 2007 and 2010. Telefonica controls the country’s leading mobile carrier by subscribers, Vivo Participacoes, as well as Telesp.

Brazil, Oi, Telefonica Brasil (Vivo)