Oi bolsters FTTH business with more Capex

Oi said its capital expenditure (Capex) touched R$3,531 million during the first half of 2020.
Oi Capex Q2 2020
Jose Claudio Moreira Goncalves is the operations and technology officer of Oi. Rodrigo Abreu is the chief executive officer of Oi.

Revenues of Oi dipped 10.8 percent to R$ 4,544 million in Q2 2020. Revenues from Brazil dropped 11 percent to R$ 4,490 million. Revenues from international operations (Africa and East Timor) rose 19.7 percent to R$ 54 million.

The decrease in revenue in Brazil reflects Oi’s strategy of divestment in legacy services such as copper and DTH in the Residential and B2B segments.

Oi said its FTTH broadband business reached 6.7 million homes passed and 1.3 million homes connected (HC), 1.2 million of which in the Residential segment, reaching 1.5 million connected homes at the end of July 2020.

Oi has 11,786 thousand broadband connections in residential segment (-15.9 percent) y.o.y. and -2.3 percent q.o.q.).

Oi has 5,364 thousand fixed line customers in the residential segment (-29.5 percent y-o-y and -8.9 percent q-o-q). Copper fixed line ARPU fell 4.9 percent.

Oi has 2,776 thousand fixed copper broadband connections in the residential segment (-37.8 percent y-o-y and -12.5 percent q-o-q).

The residential DTH TV base reached 1,234 thousand RGUs (-20.1 percent y-o-y and -5.5 percent q-o-q). Oi recorded pay-TV net disconnections of 311 thousand RGUs compared with 2Q19 and 71 thousand RGUs compared with 1Q20.

Oi TV’s penetration in households with an Oi copper fixed line reached 23 percent in 2Q20 (+2.7 pp y-o-y and +0.8 pp q-o-q). Pay-TV ARPU rose 6.4 percent over 2Q19, but dropped 2.2 percent from 1Q20. DTH TV net revenues fell 13.3 percent from 2Q19 and 7.8 percent from 1Q20, reflecting the company’s strategy of allocating more resources to accelerate investments in fiber.

Oi close the quarter with 6.7 million homes passed with fiber (HP). The company added more than 1 million HP to its base in the quarter. This represents a monthly average of over 365 thousand HP during this 2Q20.

Oi’s 2019 strategic plan states that Oi intends to reach 16 million homes passed by the end of 2021. Oi closed Q2 with around 1.3 million homes connected (HC) to fiber and a take-up rate of 19.4 percent. Oi Fibra was present in 127 municipalities.

In July 2020, Oi reached 7.1 million HP and approximately 1.5 million HC, increasing the take-up rate to 20.5 percent.

FTTH net adds totaled 357 thousand customers in Q2, outperforming the other main Brazilian players combined. In June, there were 137 thousand net additions of FTTH, the highest number since the beginning of the Fiber project.

As part of the strategy of accelerating FTTH sales, Oi sells IPTV and voice services via fiber. Approximately 89 percent of residential customers had two or more FTTH products (Broadband, TV and Voice) at the end of 2Q20, up from 72 percent at the end of 2Q19 and 84 percent at the end of 1Q20.

Fiber ARPU was R$ 80.7 in 2Q20, up 7 percent from R$ 75.4 in 2Q19 and down 4.5 percent from R$ 84.5 in 1Q20. The quarter-on-quarter decline was mainly due to current offerings, where the company is offering a promotion to new customers with the monthly fee for the first month free. Fiber revenues reached R$ 268 million in 2Q20, of which R$ 255 million from residential customers and R$ 13 million from enterprises (B2B).