Telefonica Brasil Reveals Capex, ARPU, Revenue, and Subscriber Growth in 2023

In a recent disclosure, Telefonica Brasil, a prominent telecom operator, has unveiled key financial metrics including its Capital Expenditure (Capex), Average Revenue Per User (ARPU), revenue, and subscriber growth for the year 2023.
Vivo business growth in Brazil 2023The company reported that its Capex totaled R$8,960 million, marking a decrease of 6 percent against the previous year. Additionally, Capex represented 17.2 percent of revenues, indicating a slight decrease of 2.6 percentage points (p.p.) from the previous period.

During the fourth quarter of 2023, Capex reached R$2,295 million, down by 7.8 percent compared to the same period in the previous year. This expenditure represented 17.0 percent of the Net Operating Revenue for the quarter, reflecting a reduction of 2.7 p.p.

Telefonica Brasil said investments were primarily directed towards enhancing the mobile network infrastructure, leading to a significant expansion of 5G coverage across 173 cities, encompassing 47 percent of the Brazilian population. Additionally, investments were made for the expansion of the fiber network.

Vivo’s Fiber-to-the-Home (FTTH) footprint reached 443 cities, with 26.2 million homes passed, representing a growth of 12.4 percent. The number of homes connected to FTTH increased to 6.2 million, reflecting a growth of 12.6 percent.

Telefonica Brasil reiterated its commitment to Capex investment, aligning with the company’s guidance, excluding licenses and leases (IFRS 16), which aimed at reaching up to R$9 billion in 2023.

The company’s customer base totaled 113 million accesses, with 99 million being mobile accesses. Notably, in the postpaid segment, Telefonica Brasil added 1.4 million accesses in the fourth quarter of 2023, while maintaining a historically low churn rate of 0.97 percent.

REVENUE

Financially, Telefonica Brasil reported a robust growth in net revenue, which increased by 6.9 percent, primarily driven by mobile service revenues, which grew by 8.7 percent. Fixed revenue also demonstrated positive performance, growing by 3.5 percent, buoyed by FTTH revenues, which surged by 16.5 percent, and Corporate Data, ICT, and Other revenues, which increased by 9.9 percent.

Net income for the year 2023 reached R$5,029 million, reflecting a notable increase of 23.1 percent compared to the previous year.

The growth in Mobile Service Revenue, driven mainly by Postpaid Revenue, which increased by 11.3 percent, underscores the company’s strong performance in this segment. Postpaid revenue represented 82.6 percent of Mobile Service Revenue, with postpaid churn reaching its lowest historical level and achieving the highest ARPU in the last four years.

Fixed revenue growth was primarily attributed to the significant increase in Core Fixed Revenue, which expanded by 9.5 percent and accounted for 80.9 percent of fixed revenue. The company’s strategic focus on fiber and digital B2B businesses contributed to this growth.

Telefonica Brasil’s performance in the FTTH segment was particularly noteworthy, with revenue and ARPU experiencing significant growth. The company expanded its FTTH network, connected new customers, and extended its coverage to additional cities, driven by the success of its fiber and postpaid convergent offer, Vivo Total.

Baburajan Kizhakedath