Telefónica's Brazilian arm unveils expenditure plans with fibre focus

Telefónica's Brazilian arm unveils expenditure plans with fibre focus

Telefónica Brasil has unveiled plans to spend £5.2 billion in capital expenditure over the next three years as it looks to boost fibre penetration in the country.

Executives from the Brazilian operator outlined an aggressive organic expansion plan to analysts and media at a presentation in New York, according to Reuters, with a strong focus on growing broadband services.

The 24 billion reais investment plan will include more than 10% spend (2.5 billion reais) to specifically expand broadband services in a market where mobile and paid TV growth is stagnating.

“Fibre is something we are doing very aggressively in Spain and here in Brazil. The demand for ultra broadband is huge,” Telefonica Brasil CEO Eduardo Navarro said according to Reuters.

“We have great advantages when you take our experience from Spain. Spain has the highest fibre penetration in the West, and we want to replicate that in Brazil.”

Brazil is the region’s largest economy but already has high levels of SIM penetration (119% according to the GSMA). it has one of the largest broadband markets in Latin America, though broadband penetration is only slightly above the Latin American average, trailing behind neighbouring Chile, Argentina, and Uruguay.

Telefonica’s announcement comes as TIM Brazil said it will keep 12 billion reais capex which will be focussed on broadband expansion. The Capex plans will improve in the Capex-sales ratio to < 20 percent by 2019 in the domestic business and to around 20 percent in Brazil by 2020, according to an announcement made last week.

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