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Brasil Telecom Sees Market Leading Growth - Despite Record High Churn
Brazil's smallest operator, Brasil Telecom, has released its first set of results as a subsidiary of Telemar (Oi), the deal having been fully approved by the authorities before Christmas. For now Brasil Telecom remains a separately listed company and will continue to release its own results, although the company tells us that its Investor Relations function was merged with that of Oi in January.
Brasil Telecom's results show a market-leading performance in terms of mobile connection growth (at least compared with the companies whicht have released so far) with a rate of 31.5% recorded in the 12 months to 31s December 2008 - ahead of the 28.1% posted by Claro, the 20.0% notched up by Vivo on an organic basis, and the 24.5% national average. This left the company with 5.61m connections at the end of 2008, 1.34m up year on year, and around 3.7% of the market, up from 3.5% at the end of 2007.
Brasil Telecom's outperformance was all the more remarkable given that its churn rate rose to 73.4% on an annualised basis in the fourth quarter- equivalent to around 6.1% per month - up from 50.9% in Q3 08 and 57.8% in Q4 07. This is a consequence of Brazil's fast growing and fiercely competitive market, and the fact that the balance of Brasil Telecom's customer base is ever shifting towards prepaid. The growth in 2008 came chiefly from the prepaid sector, where the number of connections grew 36% in the year, as the mix weakened to 17.5% contract, from 20.1% at the end of 2007. However, gross additions must also have been strong, as Q4 08 saw the second best net additions figures recorded in the last three years.
The consequence of the dilution of the mix for ARPU was a 17.3% annual drop to R$28.6 per month. However, the addition of 57k 3G accounts in Q4 - taking the total to over 100k - looks to have helped in tempering the decline as ARPU slid just R$0.21 (0.6%) quarter on quarter. The quite remarkable 39.3% quarter on quarter growth in data revenues recorded in Q4 is testament to the value that 3G can bring. The result was gross mobile revenue which ended 8.7% higher in the quarter and 8.2% higher in the year at R$587.6m.
Posted to the site on 18th February 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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