CANTO Weekly Newsletter – BNamericas: 08/15/14

CANTO Weekly Newsletter – BNamericas: 08/15/14

Claro Puerto Rico expands 4G LTE coverage – Puerto Rico
NII could default on US$4.4bn of debt – Moody’s – Regional
Huawei set to increase its Mexico market share – Mexico, Regional
Hondutel faces US$105mn in lawsuits – Honduras
Telecom Italia, Vivendi to meet over GVT offer – reports – Brazil, Regional

 

Claro Puerto Rico expands 4G LTE coverage – Puerto Rico

Telco Claro Puerto Rico said it has expanded the coverage and capacity of its 3G and 4G LTE networks.
The company said in a release that residents in eight cities in the north, east and west of Puerto Rico are now able to use the 4G LTE network.
Claro said the expansion is part of a US$1.5bn investment in latest-generation mobile networks on the island.
Claro Puerto Rico is fully owned by Mexican telecom giant América Móvil and launched its 4G LTE network last October.
As of 2013, Puerto Rico and Brazil had the highest number of active LTE networks in Latin America and the Caribbean, with five active operations in each.
NII could default on US$4.4bn of debt – Moody’s – Regional

Struggling Latin American telco NII Holdings could default on up to US$4.4bn of debt, ratings agency Moody’s said in a release.
The company is not currently in compliance with some of its existing debt obligations, the agency added.
NII’s share price plummeted following its announcement that it is likely to file a voluntary petition for relief under chapter 11 in the face of widening net losses and falling revenues.
Filing for chapter 11 would provide the operator with protection from creditors while it restructures its debt obligations.
The company has seen its 3G subscriber base more than triple to 1.98mn in the 12 months through Q2, but has been unable to find a strategic solution to extend its liquidity, Moody’s said.
The ratings agency lowered NII Holdings’ corporate rating to ‘Caa2’ from ‘Caa1’, as well as dropping its probability of default rating to ‘Caa2-PD’, suggesting that the firm is “subject to very high default risk, and may be in default on some but not all of its long-term debt obligations.”
NII’s net debt widened to US$4.75bn at the end of Q2, compared to US$3.98bn 12 months previously, as the company has continued to make strategic investments in deploying 3G and 4G network infrastructure which have so far failed to stem declining revenues.
The operator has invested in 3G to remedy its weak competitive position, but while NII was working to upgrade its network to 3G capabilities, its competitors were already moving to install 4G, Moody’s added.
Huawei set to increase its Mexico market share – Mexico, Regional

China’s Huawei reportedly plans to increase its market share in Mexico from 2% to 7% this year.
Kevin Ho, president of the handsets unit, said that the firm’s sales this year in Latin America have risen 276%, but it still holds a low market share regionally, local daily El Economista reported.
Huawei, the world’s third-largest smartphone manufacturer, reported smartphone sales of 34.3mn units in 1H14, a 62% increase compared to the same period last year, the company said in a release.
Much of the growth was fueled by overseas performance, including Latin America, where sales rose 180% in 2Q14 compared to 2Q13.
“In Mexico, as in other countries in the region, our target is users who are moving from a traditional cell phone to a smartphone,” Ho was quoted as saying by local daily Excélsior.
Latin America expects to see smartphone shipments increase to 122mn in 2014, up 28% from 2013, according to consultancy IDC, with Brazil, Mexico, Chile and Argentina accounting for 80% of regional sales.
For 2015, smartphone sales are expected to grow 15% to 141mn units, more than double the number of traditional handsets, with sales falling 20% to 50.9mn units, according to IDC estimates.
MARKET POTENTIAL
Huawei had practically no market share in Colombia two years ago, but now holds 18% of smartphone ownership, Ho said, according to El Economista.
In Mexico, the firm faces a diverse market held by a mix of brands.
As of 4Q13, a quarter of smartphone users had Samsung devices, while BlackBerry and Nokia units each accounted for 16% of the market share. Apple had 13%, and LG and Sony had 8% and 7%, respectively, according to telecom consultancy the Competitive Intelligence Unit.
Hondutel faces US$105mn in lawsuits – Honduras

Troubled state telco Hondutel reportedly has a dozen lawsuits filed against it in Honduran courts, totaling 2.2bn lempiras (US$105mn).
If courts rule in favor of plaintiffs, the telco would be unable to pay the amounts, local daily El Heraldo reported.
This prompted Hondutel manager Jesús Mejía and infrastructure and public services minister Roberto Ordóñez to meet with supreme court officials to argue that the suits are unfair.
Some of the suits were filed by former employees who claimed Hondutel owed them money for severance pay, including one by a former legal affairs director for a reported 214mn lempiras.
The struggling firm is on the verge of collapse amid reports of alleged corruption, financial mismanagement and an excessively large workforce.
Hondutel reported 134mn lempiras in losses in 1H14 compared to 303mn lempiras in 1H13.
Telecom Italia, Vivendi to meet over GVT offer – reports – Brazil, Regional

The CEO of Telecom Italia, Marco Patuano, and the chairman of French media group Vivendi, Vincent Bolloré, are said to be meeting on Wednesday or Thursday about an offer for GVT, the Brazilian fixed operator controlled by Vivendi, Reuters reported sources close to the matter as saying.
According to the reports, the executives are expected to discuss the terms of a counterbid for GVT from Telecom Italia.
On August 5, Spain’s Telefónica formalized a 20.1bn-real (US$9bn) offer for the Brazilian carrier, valid initially until September 3. Although highlighting that none of its operations were for sale, Vivendi said it would evaluate the bid.
A Telecom Italia counter-offer was already expected by the market.
Before Telefónica’s bid, analysts and press had discussed the possibility of a merger of GVT with TIM, Telecom Italia’s Brazilian wireless carrier.
GVT offers ultra-fast broadband, pay TV and telephony via fixed networks, mostly through fiber optics infrastructure.
A merger with TIM, the greatest strength of which is mobility, would therefore be complementary for both operators. For Telefónica, a merger would principally strengthen its presence in Brazil outside São Paulo.
Neither Vivendi nor Telecom Italia commented on the reports.

The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members

 

CANTO Member @CW_Networks President Paul Scott reconfirmed his commitment to invest and build in #PuertoRico during a panel discussion at Capacity Media #capacityconference pic.twitter.com/w3W6KnZaYb

About 2 hours ago from CANTO's Twitter via TweetDeck

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