Oi SA will fight aggressively to win customers, CEO says

31 May 2012

Francisco Valim, the CEO of Brazilian-owned telecoms group Oi SA, says his firm will get ‘very aggressive’ in its bid to retain existing users and attract new ones, as it takes the fight to rivals in the fiercely competitive domestic mobile market. In an interview with Reuters yesterday Valim, who now heads the company formed through the restructuring of Telemar Participacoes’ former operating divisions Brasil Telecom, Tele Norte Leste Participacoes, Coari Participacoes and Telemar Norte Leste, confirmed his company is on course to meet its medium-term outlook, despite a weakening in the Brazilian economy. Last month Oi announced ambitious plans to increase CAPEX investments and operating profits by 2015, and Valim confirmed that ‘current economic conditions do not change the scenario we have been forecasting’.

Although Oi is Brazil’s largest player in the fixed telephony market, it has struggled to maintain its mobile market share in the face of strong competition from Telefonica Brasil (Vivo), backed by Spain’s Telefonica, TIM Participacoes (TIM Brasil), the local unit of Telecom Italia, and Telecoms America (Claro), owned by Mexico’s America Movil (AM).

In a two-pronged battle plan, Oi hopes to staunch losses at its fixed line business by offering triple-play bundled services of voice telephony, TV and broadband internet access to the 14 million homes it serves in all Brazilian states, except Sao Paulo. ‘We’ve already stopped losing fixed line clients in several regions of Brazil,’ the CEO said, without providing details. Meanwhile, on the mobile front, the carrier is looking to extend its 3G network coverage to 80% of the population by end-2012, up from 65% today, in an effort to catch up with the competition. Finally, Valim confirmed that Oi will be bidding for 4G frequencies when Anatel holds its auction on 12 June, but issued a caveat that initial rollout plans will be slow given that Oi is still trying to maximise returns from cheaper 3G technology – which still affords ample room for growth.

Brazil, Oi