Portugal Tel 3Q Net Profit Soars On Vivo; To Pay Extra Dividend
Portugal Telecom SGPS SA (PT) Wednesday said third-quarter net profit soared almost fifty-fold to EUR5.35 billion, bolstered by the proceeds from the sale of its stake in Brazilian mobile company Vivo Participacoes SA (VIV), and announced an extraordinary EUR1.65-a-share dividend.
PT, Portugal’s biggest telecommunications company by market capitalization, said it plans to pay an ordinary dividend of EUR0.65 per share on this year’s earnings, in addition to the extraordinary dividend, and another EUR0.65-a-share dividend on next year’s earnings, as Vivo’s proceeds boosts its coffers. Last year, third-quarter net profit stood at EUR116.1 million.
PT sold its stake in Vivo in September for EUR7.5 billion and used roughly half of the funds to buy a stake in Brazilian telecommunications company Oi (TMAR5.BR).
Third-quarter operating revenue rose 0.7% to EUR952.2 million, while earnings before interest, tax, depreciation and amortization, or Ebitda, dropped 4.1% to EUR381.9 million.
PT, like other European telecommunication companies, is facing stagnant revenue in its home market as customers scale back on spending and migrates to low-cost operators. Portugal, along with many of its peers in Southern Europe, has been hit especially hard by lower consumer spending that has forced companies to cut tariffs.
Antel approves Portugal Telecom to take a stake in Oi (Brazil)
Brazil’s telecommunications regulator has approved Portugal Telecom’s plan to acquire a stake in Brazil’s Oi (Tele Norte Leste Participacoes S/A) although it said the Brazilian phone company must first clear its debts with the government.
According to Anatel’s director, Joao Rezende, there is no concentration of ownership, nor any impeditive of a competitive nature.
According to Anatel, the company owes the government US$44 million related to the Telecommunications Fiscalization Fund, or Fistel. According to Rezende, the companies will only be able to implement the operation after paying off the debts.
Portugal Telecom is planning to pay up to US$4.9 billion for a stake in the Oi group, while at the same time Oi is planning a US$7.03 billion share issuance to raise fresh capital.
Brazil Mobile Penetration Reached 96%: 1.89 Million New Mobile Subscribes in July’10
Brazil saw a significant growth in its new mobile subscriptions as it grew to 187 million in July, the telecommunications regulator Anatel revealed.
1.89 million new subscriptions were added in the month of July, an increase of 1.02% compared to June. Brazil has recorded 13.06 million new users in 2010.
Brazil now has 96.83 mobile phone users for every 100 population by now. Of the total number of mobile phones, almost 80% are prepaid and the remaining 20% postpaid.
Vivo remained the market leader with 30.25 percent of the total and is closely challenged by Claro 25.42%, TIM 24.05%, Oi 19.93% and others 0.35%.
Telebras gains govt support on broadband plan (Brazil)
www.WirelessFederation.com/news: After declaring Brazil’s largest telecom company Oi too expensive, the Brazilian government has expressed its support for the plan to revive former state telecom operator Telebras to run its broadband Internet program to the poor.
Two weeks ago, Oi came with a proposal to run the government’s project to provide broadband to poor and isolated parts of Brazil. According to the local media, Oi has asked 27 billion Brazilian reals ($15.3 billion) in government incentives and tax breaks over five years to do it, while, under the proposal to revive Telebras, investments would total just BRL6 billion.
The officials at the Presidential Chief of Staff’s office and the Treasury, a former opponent to Telebras’ involvement, have been swayed towards the revival of the former state monopoly due to the difference in price.
Government-owned fiber-optic networks will be utilized to expand broadband coverage, leading to complaints from private telecom companies of unfair government competition.
Brazil’s mobile base increases by 0.67% in Feb
www.WirelessFederation.com/news: With an increase of 0.67 percent on the total number of mobile lines in January, the mobile phone base of Brazil reached 176.8 million in February. The latest data has been published by Brazil regulator Anatel.
Almost 1.2 million phones in the country were added in the month of February which has been the second best performance in the month after 2008. The month of February was ended by Vivo on a good note as its market share went up from 29.87 percent in January to 29.93 percent.
With a market share of 25.50 percent against 25.52 percent in January, Claro stood at the second spot. TIM Participacoes held third position with 23.65 percent market share, up from 23.63 percent in January, while Oi finished the month with 20.56 percent against 20.61 percent in January.
12.96 million mobile lines received 3G mobile services.
Brazilian telco Oi to invest $1.7bn-$2.3bn in 2010
www.WirelessFederation.com/news: An investment of 3 billion to 4 billion Brazilian reals ($1.7 billion to $2.3 billion) in 2010 has been considered by Brazil’s largest telecommunications company, Tele Norte Leste Participacoes S/A. The focus of the investment is on expanding broadband Internet capacity for fixed and mobile networks.
BRL5.1 billion was invested by the operator in 2009 and 70% of that amount was pumped into networks. The investment will also allow the company to reduce debt levels. The company’s debt level rose to 2.2 times earnings before interest, tax, depreciation and amortization, or EBITDA, in 2009 following the purchase of Brasil Telecom, a rival operator, and the campaign to enter into the Sao Paulo mobile market.
The aim of the company is to reduce that debt amount to 1.7 times to 1.9 times EBITDA by the end of this year. There are probabilities that the Sao Paulo mobile operation reach break-even in April of this year, which will take some pressure off finances.
USD1.22bn debentures issue to be delayed by Brazil’s Telemar
www.WirelessFederation.com/news: USD1.22 billion non-convertible debentures issue might be postponed by Brazilian telecoms operator Telemar Norte Leste (Oi) for up to 60 days.
Oi and Banco Santander Brasil will also underwrite the debentures issue and the funds will be raised in two parts by Telemar, a five-year issue and a ten-year issue.
According to Oi, it needs to disseminate more information to investors concerning its buyout of Brasil Telecom, which it purchased last year.
