Oi SA sells US$2 billion assets to boost Brazilian FTTH

News and Business

Brazil’s largest fixed-line operator Oi SA is to divest non-core assets – including its Angolan subsidiary Unitel – to raise around US$2 billion to invest in FTTH broadband in its domestic market.

In a new strategic plan unveiled this month, the company laid out its FTTH goals. These included:

  • The re-use of its transport backbone to boost residential fibre optic uptake (and facilitate 5G); this approach is expected to lower the cost of fibre deployment by around 30% compared to traditional methods
  • The passing of 4.6 million homes by YE2019; with 16 million expected by YE2021, and a target of 30 million potential homes that offer an attractive investment return. The 16 million homes figure is 66% higher than the operator’s previous goal.
  • A revenue compound annual growth rate of 30% during 2019 to 2024, offsetting a revenue decline in copper network contributions by YE2021
  • Accelerating wholesale operations, almost doubling expected revenues by YE2024 to achieve market leadership.

Oi SA (formerly Telemar) reckons that fibre will be a key driver of future EBITDA and cash flow, and will play a pivotal role in the delivery of broadband, wholesale, TV, B2B and mobile 5G services.

The company reports that maintenance costs with FTTH are between 30% and 50% lower than with copper. It notes that that in the 10 cities where FTTH was launched in 2018, average service take-up was 8% after 3 to 5 months of deployment, reaching up to 11% in 3 months in the best-case cities. It adds that the average churn was 70% less compared to copper, reaching up to 80% in the best-case cities.

At present Oi SA has a network of 363,000 km of fibre, which is two times larger than that of its nearest competitor. This network serves 2,270 cities, which is 1,000 more than the nearest competitor. It also has 43,000 km of ducts, billed as the highest integrated infrastructure in Brazil.

For more information, visit www.oi.com.br

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