CEO: Amazônia Celular Expects to Post Profit in 2006

Brazilian mobile carrier Tele Norte Celular Participações, which operates under the Amazônia Celular brand, expects to record a net profit this year, company CEO Ricardo Sacramento told BNamericas.

"It is my number one priority at the operator level to break even this year and to generate a positive net result," said Sacramento, who joined the company in late 2005.

Amazônia Celular has emphasized to its employees the need for positive Ebitda growth and a strong bottom line.

Nonetheless, Amazônia will face an uphill struggle. In the first quarter of 2006, the company posted an Ebitda margin of 21.8% compared to 32.6% a year earlier. The operator also reported a net loss of 8mn reais (US$3.6mn) compared to a 1.9mn reais loss the year before.

STRATEGY

Sacramento, who was formerly the CEO of Brasil Telecom GSM, is confident he can turn the business around by year-end through several key steps. His first move has been to concentrate on quality of service for Amazônia's high-end users to minimize the churn rate.

According to Sacramento, it is important to get to know one's own customers and to ensure a high quality of service in its own call centers.

The CEO has also brought in new executives to focus on corporate sales with a strong emphasis on the SOHO business. "The market expects us to be more aggressive in the SOHO segment," he said.

On the prepaid front, Amazônia Celular launched a project in March called Me Liga, which is a phone card that credits one extra real to the card for every call received from any operator. The aim is to attract new customers and build loyalty, according to the executive.

Amazônia Celular also launched a series of new corporate stores in towns and mid-sized cities across the Amazon region. The company opened six in the state of Pará and four in Maranhão in May and June.

"Subscribers singled out coverage and network quality as essential in choosing a carrier," Sacramento said, adding that the company had set aside around 60mn reais of its 2006 budget for addressing these issues.

RIGHT TRACK

Thomas Abreu, an analyst with Pyramid Research, is confident that Sacramento is on the right track for strengthening the company's finances by concentrating on adding value to the subscribers they have rather than seeking to get more.

"Amazônia has decided to sacrifice market share for profit," Abreu told BNamericas.

"They are getting ready to sell and there are two ways to window dress: one is to get subscribers and the other is to improve finances... I think that they can make it [break even]," Abreu said.

BNAmericas.com"

Posted to the site on 7th July 2006