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Latin Wireless Index: Brazilian telecoms down

Brazilian telecoms saw declines or modest growth in the latest LBC Latin Wireless Index; Mexico’s América Móvil and Chile’s Entel lead for largest revenues and percentage growth, respectively.

Brazilian wireless providers were down on the whole in the third quarter of 2012 when compared with the same period in 2011 according to data from the latest Latin Wireless Index (3Q 2012), published by Latin Business Chronicle.

Oi, Brazil’s largest telecommunications provider, saw the second-largest decline in our survey with a 7.4 percent drop in revenue, while Vivo, the country’s second-largest provider, saw a 1 percent decrease. The country’s TIM saw modest growth of 1 percent - the only Brazilian provider on the survey to post an increase.

Partly responsible for the result was a decision by Brazilian telecommunications regulator Anatel. In July it forced companies not sell phones to customers where they could not provide appropriate service. That, according to Vinicius Caetano, Senior Analyst for Latin America at Pyramid Research, might have hurt sales for the country’s providers.

Still, the analyst warns about being too pessimistic about the Brazilian numbers: “2011 was an exceptionally good year for Brazilian telecoms, and was by no means a reference for what you should see every year,” he said.

But it was US-based NII Holdings (Nextel) which saw the largest decline on our survey, with a 15 percent drop in profits over the period, with revenues down by $262 million, due largely to problems with the Brazilian market.  Caetano told Latin Business Chronicle that the company faced lawsuits from competitors in Brazil due to its lack of a license to operate cellphone service in the country, and that the company has failed to gain traction regionally in the 3G market.

Elsewhere in the region, the news was more positive.

Mexico’s América Móvil continued to be the region’s largest and most profitable provider, with revenues of $13.7 billion – a 7.6 percent increase over the previous year. But this rate of growth was second to Chile’s Entel, which saw a 26.7 percent improvement to $746 million in revenues – the highest percentage change in this survey.

“Our mobile client base grew significantly, surpassing 10 million people, and we continue to see an increase in the penetration of smartphones,” Entel CFO Felipe Ureta wrote in a press release. “We also saw an important increase in integrated voice, data, internet, and IT solutions for the business sector,” he added. 

Argentina’s Telecom also saw strong gains with 5.3 percent growth to $759 million in revenues, as did Luxembourg’s Millicom with 5 percent to $949 million. Spain’s Telefonica, the second-largest regional provider after América Móvil, also saw a 3.5 percent revenue increase over the same year, bringing them $6.8 billion in revenue.

The index shows the top nine companies saw combined revenues of $34.1 billion in the third-quarter of 2012 – a 2.8 percent increase over the previous year.



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