Brazilian operator Oi reported first quarter net revenues of BRL 6.76 billion, down 4.4 percent year on year, impacted by MTR cuts, increased competition resulting form the ongoing economic recession and costs related to a debt it’s in the process of restructuring. EBITDA fell 12.6 percent to BRL 1.69 billion, due above all to lower revenues, while the company’s net loss widened to BRL 1.64 billion from BRL 469.9 million a year earlier. Capex increased 22.3 percent year on year to BRL 1.20 billion in the quarter, focusing mainly on network modernisation as part Oi’s transformation plan to support recently-launched offers and improve customer experience.
Oi had a total of 69.5 million revenue-generating units at the end of March, down 5.5 percent year on year, including 16.2 million residential, down 5.7 percent, 45.6 million personal mobility, down 5.0 percent and 7.2 million corporate/SMEs, down 9.2 percent. In total, the company had 9.9 million fixed line customers in the residential segment at the end of the quarter, a 7.7 percent year on year fall, plus 5.1 million consumer fixed broadband customers, down 1.9 percent, and 1.18 million pay-TV subscribers, down 4.2 percent. Residential service revenues fell 3.9 percent year-on-year to BRL 2.39 billion, but residential ARPU was BRL 80.80 in the quarter, 4.2 percent higher than last year.
The company’s mobile customers also fell, by 5.0 percent year on year, to 45.6 million at the end of the first quarter, including 38.7 million pre-paid subscribers and 6.9 million post-paid, down 5.3 percent and 3.2 percent respectively. Oi's 2G coverage reached 3,401 municipalities (93% of the country's urban population), 3G coverage expanded to 1,280 municipalities (79% of the urban population) and 4G-LTE coverage was up 196 percent year on year to 133 municipalities (51% of Brazil’s urban population). Mobile ARPU fell 5.7 percent year-on-year to BRL 16.70 in the first quarter, while handset revenue plunged 71 percent to BRL 58 million.
Oi also announced that its debt was BRL 49.4 billion at the end of the first quarter, down from BRL 54.9 billion, with almost 80 percent held in foreign currencies. Last month, Oi entered into negotiations with investors represented by Moelis & Company to restructure BRL 14 billion of bonds. The company is also reportedly cutting around 2,000 employees, or 15 percent of its workforce, with a view to reducing costs.
