Portugal Telecom to lower Capex to below €500 million in 2013

Telecom Lead Europe: Zeinal Bava, chief executive officer, Portugal Telecom, says the company will lower Capex (capital expenditure) in 2013 to below €500 million.

Portugal Telecom’s Capex in 2012 declined by 18 percent to to €1.317 billion from €1.224 billion , reflecting lower Capex in the Portuguese business — down 14.1 percent to €555 million.

The decline in Capex in Portugal was due to the end of modernization process of infrastructure and networks and investments in future
proof technologies and networks occurred in previous years.

In 2012, its Capex amounted roughly 20 percent of revenues.

In 2012, increase in Capex was primarily related to the impact of the proportional consolidation of Oi and Contax in Q1 2012,
partially offset by the contribution of Dedic / GPTI in H1 2011.

Portuguese telecommunications businesses invested in FTTH and 4G-LTE last year.

Oi invested in 2G and 3G coverage and increasing broadband speed and capillarity.

The other major investments were in the African submarine cable, optical fibre and 4G.

The Capex decline at Oi reflects mainly the impact of the devaluation of the real, which amounted to BRL22 million and the Capex in the Portuguese business decreased by almost 25 percent in the fourth quarter. Other Capex was stable notwithstanding the investments in submarine cable by MTC in the Namibia.

Addressing analysts, Zeinal Bava, chief executive officer, Portugal Telecom, said: “Portugal Telecom believes investment in innovation will differentiate its product offering in Portugal, and will allow it to continue to grow market share of subs and revenues without relying solely on price.”

Strategic priorities for Portugal Telecom are convergence and the cloud.

Net income declined to $230 million in 2012 from $339 million in 2011. Portugal Telecom — with 100.4 million customers in 2012 — reported operating revenues of €6.599 billion, while EBITDA stood at €2.269 billion.

In Portugal, despite a severe macroeconomic environment, number of customers increased 3.4 percent in 2012. Broadband grew 10.8 percent, triple-play customers were up 22.6 percent, FTTH customers were up almost 50 percent in 2012.

In Brazil, residential mobile increased 3 percent in terms of customers, and business and corporate users rose 14.3 percent.

In Africa and East Timor, its number of customers increased about 16 percent.

The mobile giant has 328,000 FTTH customers. More than 40 percent of all customers are now triple play.

Data accounts for about 34.2 percent of revenues.

In enterprises business, its focus is on value added services and Cloud.

For B2C cloud — Cloud PT — the company has partnerships with Oracle, SAP, Cisco, Fujitsu, EMC, etc.

52 percent of revenues of Portugal Telecom are non-voice revenues.

3G footprint is growing in Brazil and 72 percent of brazil’s population is now covered with 3G.

Arvind Krishna


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