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Brazil's Vivo posts net profit of US$2.5mn in Q3

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Vivo, a joint venture between Spain's Telefonica and Portugal Telecom, generated net revenue of 3.25bn reais in 3Q07, up 15% compared to 2.82bn reais in the year ago period.

The company's Ebitda was 833mn reais, up 16.4% compared to 3Q06, while the Ebitda margin grew to 25.7% from 25.3% over the same period.

Capex for the quarter totaled 369mn reais, down 17% compared to 445mn reais in the same period of 2006.

Vivo's total capex for 2007 will not exceed 1.950bn reais, whereas the previous forecast was 1.732bn reais, Vivo finance director Ernesto Gardelliano said during a conference call with investors.

The increase in capex is due to the purchase of licenses in the 1.9GHz band and related investments to use this spectrum, he added.

During the third quarter the company achieved a major milestone by gaining full national coverage. On September 25, Vivo won 13 licenses in the 1.9GHz band. The company took licenses in the states of Alagoas, Ceara, Paraíba, Piaui, Pernambuco and Rio Grande do Norte and also increased spectrum in its current area of operations.

Vivo did not provide guidance for 2008 capex.

Vivo ended the quarter with 31.3mn subscribers, an increase of 9% compared to end-3Q06. The company recorded a net addition of 1.08mn subscribers in the period.

ARPU was 30.8 reais, up 7.3% compared to 28.7 reais in 3Q06.

Vivo believes it now has a market share of 36.8%, based on data from the telecoms regulator Anatel.

On August 2, Vivo reached an agreement to acquire control of local operator Telemig Celular, a move approved by Anatel on October 23. Vivo is still awaiting approval for the acquisition of Telemig's sister company Amazonia Celular.

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