Wireless Federation

Telefonica to invest US$14.6 billion in Brazil

On 03.29.11, In Mobile, By Editor

Spanish telecom giant Telefonica will invest US$14.6 billion in Brazil over three years (2011-2014).

This represents an increase of 52% over the last four years.

The company increased its investment to tap the growing demand for telecommunication services in Latin America. We believe Telefonica continues to invest in growth and transformation projects, fostering the development of broadband services (both fixed and wireless).

Latin America is one of the best performing regions and remains the principal growth region for Telefonica with a penetration rate of 99% at the end of fiscal 2010. The company reported solid growth in Latin America in the recently concluded quarter.

Brazil was the largest contributor to Latin America’s revenue that improved roughly 55% in the fourth quarter of 2010. Further, Telefonica bolstered its position in the country after acquiring the full stake in Vivo Participa§µes in October 2010. Vivo generated a massive 150% growth in revenue in the recently concluded quarter.

The consolidation of Vivo makes Telefonica the leader in Brazilian telecom market. It enables the company to offer full competitive bundled service and enhances its competitive position against America Movil. Telefonica merged Vivo with its Brazilian fixed-line voice and broadband unit Telesp, which is struggling to perform.

Telefonica is the leading telecommunications company in Spain by customer accesses, which has now become saturated with the penetration rate of more than 100%. We believe Telefonica’s dominant position in the Spanish telecom market and the strengthening position in the Brazilian market make it attractive for investment. The stock retains a Strong Buy rating with the Zacks #1 Rank for the short term (13 months).

However, for the long term, we are maintaining our Neutral rating as Telefonica remains challenged by a weak Spanish economy and ongoing reduction in mobile termination rates. We are also concerned about the company’s highly leveraged balance sheet, increasing competition (especially in Brazil and U.K.) and regulatory involvement, all of which may limit upside potential of the stock.

Filed under:Mobile Tagged with: Brazil • Broadband Services • Latin America • operator • Spain • Telefonica • Telesp • U.K • Vivo Participacoes

Vivo plans to integrate with Telesp (Brazil)

On 12.31.10, In Mobile, By Editor

Vivo has revealed that it is planning to be integrated with its sister company Telesp.

In a securities filing the Brazilian mobile operator stated that merging with Telesp, a fixed line operator also owned by Telefonica, would cut costs and simplifies the shareholding structure.

Telefonica bought Portugal Telecom’s stake in Vivo for US$9.9 billion in July, becoming the controlling shareholder.

Filed under:Mobile Tagged with: a fixed line operator • Brazil • Mobile • Portugal • Portugal Telecom • Telefonica • Telesp • Vivo

Telefonica Net Profit More Than Doubles on Latin America (Spain)

On 11.11.10, In Mobile, By Editor

Spanish telecoms giant Telefonica SA (TEF) said Thursday its third-quarter net profit more than doubled as revenue growth in Latin America offset weak Spanish operations.

Madrid-based Telefonica, Europe’s second-largest telecommunications company by market value after U.K.-based Vodafone Group PLC (VOD), said net profit grew to EUR5.06 billion, slightly below forecasts from 16 analysts of EUR5.29 billion, due to higher taxes.

Telefonica also said operating income before depreciation and amortization, or Oibda, rose 65% to EUR9.46 billion during the same period, while total revenue increased 7.3% to EUR15.23 billion.

The appreciation of Latin American currencies against the euro also boosted revenue growth abroad.

Telefonica recently purchased Portugal Telecom SGPS SA’s (PT) stake in Vivo Participacoes SA (VIV) in order to take full control of the Brazilian cellular company. Telefonica plans to merge the company with fixed-line telecommunications company Telesp (TSP) to bulk up its operations in the high-growth Brazilian market.

The acquisition also boosted profits due to asset valuation adjustments, Telefonica said.

Filed under:Mobile Tagged with: Brazil • Latin America • Mobile • Portugal • Portugal Telecom SGPS SA • Spain • Telefonica SA • Telesp • U.K • Vivo • vodafone group plc

Telefonica Spain to invest USD2.77bn in Telefonica Brazil

On 05.21.10, In Mobile, By Editor

www.WirelessFederation.com/news: BRL5 billion (USD2.77 billion) has been planned to be invested by Spanish telecoms giant Telefonica in Brazil in 2010 to improve both its fixed line and mobile telecoms services.

According to group’s head of Latin American operations Jose Maria Alvarez Pallete, Telefonica has invested a total of USD110 billion in the region since it entered the LatAm market in the 1990s.

BRL3.4 billion was invested in Brazil by the Spanish heavyweight last year and owns Telefonica Brazil (Telesp) and has joint control of the country’s largest mobile operator by subscribers, Vivo Participacoes

Filed under:Mobile Tagged with: Brazil • Europe • South America • Spain • Spain Telefonica • Telefonica Brazil • Telesp

Telefonica aims better ties with Telesp & Vivo (Brazil)

On 04.20.10, In Mobile, By Editor

www.WirelessFederation.com/news: In order to improve its weakening position in Brazil, Spanish telecoms behemoth Telefonica has reportedly expressed its desire to strengthen the relationship between its Brazilian fixed line unit Telefonica Brazil (Telesp) and Vivo Participacoes.

Vivo Participacoes is the Sao Paulo-based mobile operator it jointly owns with Portugal Telecom.

Earlier, the Brazilian unit was considered to be one of the most profitable zones for Telefonica but currently it is going through a very rough phase, struggling amid intense local competition. Telefonica has claimed to improve its trading position by seeking closer integration between Telesp and Vivo which in turn can generate improved cost savings.

No comment has yet been received from Telefonica and Portugal Telecom.

Filed under:Mobile Tagged with: Brazil • Europe • operator • Portugal • Portugal Telecom • South America • Telefonica • Telefonica Brazil • Telesp • Vivo • Vivo Participacoes

Telesp targets MVNO market via Vivo’s network (Brazil)

On 03.26.10, In Mobile, By Editor

www.WirelessFederation.com/news: Backed by Spain’s Telefonica, Brazilian fixed line operator Telecomunicacoes de Sao Paulo (Telesp) has expressed its desire to enter the domestic MVNO market using Vivo’s network which also needs the necessary regulatory approval.

According to Telesp president Antonio Carlos Valente, the company has planned to operate the new MVNO venture over Vivo’s mobile network.

Telefonica also has control over 50% stakes in Vivo along with equal partner, Portugal Telecom.

Filed under:Mobile Tagged with: Brazil • Essar • Europe • MVNO • operator • Portugal • Portugal Telecom • Sao Paulo • South America • Spain • Telefonica • Telesp

Telefonica Brazil to invest USD 1.9b

On 02.23.10, In Mobile, By Editor

www.WirelessFederation.com/news: BRL 3.5 billion is planned to be invested by Telefonica in Brazil throughout this year. BRL 2.3 billion of the total amount will go to Telefonica’s Brazilian fixed-line operator, Telesp.

Telefonica’s other units in Brazil, including internet portal Terra, call centre services provider Atento and mobile phone company Vivo will receive the remaining CAPEX.

Filed under:Mobile Tagged with: Brazil • CAPEX • operator • South America • Telefonica • Telefonica Brazil • Telesp

Brazilian telco Telesp Q4 net profits down 24.7%

On 02.15.10, In Mobile, By Editor

www.WirelessFederation.com/news: Due to the fall in the service revenues, the fourth quarter net profits of Brazilian telecoms operator Telecomunicacoes de Sao Paulo (Telesp) went down 24.7% and totaled BRL544.8 million (USD294 million).

Fourth quarter losses reached BRL51.2 million, compared with a loss of BRL43.5 million in the year-ago period. Net revenues went down from BRL4.1 billion in 4Q08 to BRL3.9 billion in 4Q09 and EBITDA dipped 6.4% year-on-year to BRL1.39 billion.

The full-year net profits of the company stood at BRL2.17 billion last year, down 10.2% y-o-y and EBITDA reached BRL5.87 billion (down 10.4%).

Filed under:Mobile Tagged with: Brazil • EBITDA • Net Profits • Net Revenues • operator • Q4 • Sao Paulo • Service Revenue • South America • Telesp

Telefonica- Telecom Italia merger by March (Brazil)

On 02.10.10, In Mobile, By Editor

www.WirelessFederation.com/news: The merger deal between Spain’s Telefonica and Telecom Italia might be announced in March after both the companies report financial results later this month. Telefonica has already discussed the deal with bankers and has obtained financing for the deal.

If materialized, the deal would merge Brazil’s largest and third-largest mobile phone companies, as well as the fixed-line operator in Sao Paulo.

But the way ahead does not seem to be very smooth for the merger as both the companies are likely face a tough test from antitrust officials in Brazil. 50% stake in mobile operator Vivo, Brazil’s largest mobile phone company, and Telecomunicacoes de Sao Paulo, or Telesp is owned by Telefonica and 86% stake in TIM, the country’s third-largest mobile phone company is controlled by Telecom Italia.

Filed under:Mobile Tagged with: Brazil • Europe • merger • operator • South America • Spain • Telecom Italia • Telefonica • Telesp