Telefonica Brazil open to ISP acquisitions

Telefonica Brazil open to ISP acquisitions

Telefonica Brazil did not rule out acquisitions to bolster its Vivo brand’s internet offering, after being linked to buying rival ISPs, despite plunging year-on-year income. 

In an earnings call, Telefonica Brazil CFO David Melcon said the operator is “always attentive to market opportunities in every way, and that also includes fibre”.

Melcon highlighted the company has a target to gain 29 million internet connections by the end of 2024 with six million stemming from joint venture FiBrasil and the other 23 million stemming from its Vivo brand.

Currently, Vivo has 21 million connections a rate which is “on pace” to hit target said Melcon, which is why the operator is not rushing into mergers and acquisitions.

“If we are going to face any M&A decision in the future it depends on the overlap of the network, on the quality of the network and the quality of the companies being sold.

“M&A is complex [in fibre]. We also need to see how we are going to integrate our customer base because one factor to consider is buying the network, and the second is buying the customer [base]. We have a clear plan to get to 29 million and that's building together with FiBrasil," said Melcon.

In its Q2 2022 financial results, the company reported a net income year-on-year plunge of 44.6% to BRL746 million (US$140m) due to higher expenses stemming from its mobile unit.

There was a 282% surge in operating costs to BRL601 million as the company took on debt to pay for 5G licenses in Brazil’s recent auction, and acquired rival Oi’s mobile assets, at a time of higher interest rates.

EBITDA  amounted to BRL 4.5billion which was an increase of 8.3%, while net revenues grew 7.8% to BRL11.8 billion.

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