Category Archives: Telecoms

Brazil market slows for Telefonica

Telefonica reported third-quarter revenues up 10.8 percent year-on-year to EUR 11.919 billion, as a return to growth in Spain and the takeover in Germany helped offset slowing growth in Brazil. Revenue in its home market increased 0.2 percent to EUR 2.998 billion, the first growth in seven years. Latin America sales rose 8.9 percent to EUR 3.634 billion, but Brazil declined 5.5 percent to EUR 2.736 billion. Germany also contributed to growth after the takeover of E-Plus, with revenue there up 62.4 percent to EUR 1.979 billion. The synergies in Germany helped OIBDA at Telefonica increase 2.9 percent to EUR 3.693 billion.

On an organic basis, both the group’s revenue and OIBDA rose 4.8 percent in Q3. Net profit was still down 1.6 percent to EUR 884 million. In the year to date, capital expenditure rose 8.8 percent to EUR 7.101 billion, while operating cash flow was down 1.3 percent to EUR 3.912 billion. Net debt was reduced by EUR 1.547 billion in the quarter to EUR 49.691 billion, bringing leverage to 2.84x EBITDA.

Assuming the sale of O2 UK goes ahead, leverage would be 2.32x EBITDA, within the company’s year-end target of 2.35x. Telefonica also maintained its other targets for the year, for revenue growth of over 9.5 percent, after 13.5 percent in the first nine months, and a drop of no more than 1.2 percent points in the adjusted OIBDA margin. In the first nine months, the margin was down 1.3 points.

Telefonica ended September with a total 327.196 million connections, up 12.1 percent from a year ago but down by around 2.3 million from June due to prepaid disconnections in Brazil. The mobile subscriber base reached 251.383 million, up 11.6 percent year-on-year and down by almost 2.3 million from June. Fixed broadband customers were up by almost 200,000 in the quarter to 20.946 million, and LTE customers rose by around 5 million to 23.578 million.

America Movil loses appeals against dominant status

A Mexican federal court judge has dismissed appeals lodged by America Movil against the March 2014 decision by the telecoms regulator (IFT) declaring the company a dominant player. In the ruling handed down on 27 October, the judge of the second district court specializing in telecommunications, Silvia Fernandez Ceron, deemed the measures imposed by the IFT to be valid, reasonable and proportionate. “The Complainant failed to invalidate the legality of the authority’s decision to consider it part of a dominant economic group in the telecommunications sector, and impose on it the measures it considered pertinent,” declared the judge in her ruling.

America Movil was declared a dominant player in the telecoms sector last year, leading to a series of stricter rules. In July the IFT ordered Telmex (America Movil) to open up the last mile of its network to rival operators, as part of the measures put in place to introduce greater competition in the local telecommunications market.

Ericsson and America Movil to launch 5G projects in Brazil

Ericsson has announced an agreement with America Movil to bring the first 5G and IoT test systems to Brazil in 2016. The company said its 5G test system is designed to allow telecoms operators and ecosystem partners such as academic institutions, health care, energy and agriculture players to test 5G capabilities in a live network.

The plans were announced during a visit to Ericsson’s Swedish headquarters by Brazilian president Dilma Rousseff, with the company emphasising that its new 5G-enabled applications would help Brazil meet the objectives of its digital agenda. As part of their deal, Ericsson and America Movil will also deploy an IoT test system focusing on low battery consumption applications, such as low power sensors for remote areas, enabling Brazilian industries and the public sector to prepare for ICT transformation.

Ericsson also announced new 5G research projects with the University of Sao Paulo, University of Campinas and Federal University of Ceara, to be conducted in 2017.

Chile’s WOM won’t be given access to 700 MHz band

Chilean mobile operator WOM (formerly Nextel Chile) will not be granted access to the 700 MHz band, acording to Chilean telecoms regulator Subtel.

Securing spectrum in the 700 MHz band had been one of the objectives of UK-based investment fund Novator since it acquired Nextel Chile (later rebranded as WOM) in January. However, blocks had already been allocated and any subsequent release of spectrum would have to be assigned via tender. “In the hypothetical event we decided that part of the spectrum of the emergency network might be reallocated to a company we would have to launch a public tender, as has been done with the 2600 MHz and 700 MHz bands, with all companies participating, not only WOM,”

IFT orders Telmex to offer better last mile terms

Mexican telecoms regulator IFT has announced that it will be requiring America Movil’s fixed-line units Telmex and Telnor to offer rival operators improved unbundling terms with a view to increasing competition in the sector. The IFT has been applying stricter measures since America Movil was declared a dominant player last year and has proceeded to reject the initial last mile terms and conditions submitted by Telmex and Telnor on 01 September.

Telmex, which currently operates some 70 percent of Mexico’s mobile and fixed lines, will be given 20 days in which to submit a revised plan following formal notification of the regulator’s decision.

Digicel abandons IPO plans

Digicel Group has announced plans not to proceed with an IPO at this time. Despite significant support from a number of investors during the marketing period, Digicel has decided that current conditions, especially in emerging markets, make an IPO a less attractive option for the company.

Chairman Denis O’Brien said that an IPO was and predicated on achieving fair value for the company. He said the company’s growth plans remain unchanged and that it remained in a strong position to exploit areas of interest in data, business services, cable TV and broadband.

Pay TV Subscriptions increase by 5% in Latin America

Latin America reached 69.92 million pay-TV subscribers at the end of the second quarter, equivalent to 37.7 percent of all households and an increase of 5 percent compared to the year-earlier quarter, according to the latest data from Dataxis.

Brazil remains the region’s largest pay-TV market, accounting for 28.5 percent of the total, although Venezuela now has the highest home penetration rate, boosted by CANTV’s low cost model. Satellite TV was the leading pay-TV access technology with 50.1 percent of the total number of subscribers, said Dataxis. while America Movil had the highest number of recorded pay-TV subscribers at the end of Q2, accounting for 21.1 percent of the region’s total, followed by DirecTV, Televisa, Telefonica and Clarin.