Thursday, January 31, 2019

Brazil’s Algar Telecom expands fiber optics – Brazil, French Guiana

Digicel appoints Jean-Yves Charlier as CEO – Caribbean, Central America

Bahamas looking to transform into a technology hub – Bahamas

Ericsson Europe, LatAm unit posts 8% growth – Regional

Moody’s positive on AMX acquisition of Telefónica’s CentAm assets – Regional


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Brazil’s Algar Telecom expands fiber optics – Brazil, French Guiana

Brazilian telco Algar Telecom has increased the capacity of its fiber optics network in the south of Minas Gerais state, where the telco is based, by a factor of four, expanding its built-in fiber optic networks to nearly 1,200km.

The investment figures were not disclosed, but the works lasted 11 months, Algar said in a statement.

This expansion will allow services to be improved for around 2,000 retail and corporate customers in at least four major cities in the region. The initiative also expands traffic between Uberlândia and São Paulo, in São Paulo state.

Algar Telecom has been present in the south of Minas Gerais state since last year. In the retail segment, the company offers mobile telephony services in the cities of Pouso Alegre, Varginha and Passos.

In Poços de Caldas, the company offers fixed and mobile telephony services, as well as broadband plans. In the corporate segment, solutions are available for companies in all cities.

Algar Telecom reports having over 88,000 micro and small businesses in its customer base. It aims to add another 60,000 new clients within five years.

The company plans to add more than 2,300km of fiber-to-the-home (FTTH). Its fiber optic network now spans 60,000km.


Recently, Algar’s board approved an issue of debentures with the goal of raising 350mn reais (US$94mn) to fund fiber rollouts and other projected investments.

Digicel appoints Jean-Yves Charlier as CEO – Caribbean, Central America

Caribbean and Central American telco Digicel has appointed Jean-Yves Charlier as the company’s new CEO.

The executive arrives a month after the death of Alexander Matuschka von Greiffenclau in December. Charlier was appointed to the board of directors of Digicel Group in September 2018 and became executive VP in December 2018.

Charlier previously served as CEO of Dutch telco VEON (formerly VimpelCom) and and led the transformation of the US$10bn telecoms group that serves 240mn customers.

Prior to that he served as chairman and CEO of France’s second largest mobile operator SFR. Before that, Charlier was CEO of Promethean World and COLT and held senior roles with British Telecom, Equant and Wang.

Digicel has 14mn subscribers in 31 markets. Earlier this month, the company reached an agreement with 98% of bondholders of US$2bn and US$1bn in debt to extend maturity by two years to 2022 and 2024, respectively.

Bahamas looking to transform into a technology hub – Bahamas

Bahamas is looking to transform itself into a technology hub by attracting ICT companies to complement its touristic and financial industries, Prime Minister Hubert Minnis said in a recent speech.

“We have a comprehensive and aggressive agenda to boost growth and jobs in Grand Bahama, including transforming the island into a technology hub,” Minnis said.

The archipielago, he said, has recently shown sustained economic growth and job creation after being hit hard by the 2008 world economic recession.

Since 2017, he added, the government has approved foreign direct investments for over US$3.7bn, “due in part to the increase of Information Communication Technology enterprises and boutique financial services investments as companies look to make the Bahamas their regional headquarters for the Caribbean.

Tourism, the nation’s largest source of income, has benefitted from ICT projects such as one for a wearable device that helps tourists replace check-in lines, cabin keys and the like, he added, as well as from digital transformation companies helping organizations automate manual processes.

Ericsson Europe, LatAm unit posts 8% growth – Regional

Revenues of Swedish telecoms equipment supplier Ericsson increased 8% in its Europe and Latin America sales unit to 18.2bn krona (US$2bn) in Q4. Strong business in Latin America was offset by lower sales in managed services contracts.

For 2018, sales in that region rose 6% to 60.3bn krona.

Globally, Ericsson’s fourth-quarter sales rose 19% to 63.8mn and 3% over the full year to around 211bn krona.

Sales were mainly driven by networks and digital services.

Ericsson’s revenue growth slowed in recent quarters. The company has undergone a major restructuring to reduce the headcount and debt.

The company took a hit on costs related to restructuring charges and revamping its support systems business.

Ericsson has been hurt by a slowdown in 4G network sales as operators await 5G technology and by competition from Chinese Huawei.

Moody’s positive on AMX acquisition of Telefónica’s CentAm assets – Regional

The acquisition by América Móvil (AMX) of Spanish giant Telefónica‘s assets in Guatemala and El Salvador is credit positive for the Mexican company, as it will help it secure its position in those two markets without a noticeable effect on credit metrics, according to Moody’s Investor Services.

The company, already the largest telecommunications operator in Latin America, said last week that it reached an agreement with Telefónica and associates in the two countries to acquire a majority stake in its telecoms operations for US$648mn.

The transaction will make América Móvil a stronger second operator in Guatemala, behind Millicom‘s Tigo, while it will also help consolidate the competitive scenario in El Salvador.

“The acquisition will… have an immaterial effect on the financial metrics of AMX, which we expect to fund this acquisition with its available cash. The acquisition will raise the company’s net debt/Ebitda ratio, including our standard adjustments, by less than 0.05x.,” Moody’s said.

The deal “gives AMX good growth opportunities as data usage increases, along with the deployment of faster 4G wireless broadband in the future, and the increase over time in smartphone penetration. While the penetration of SIM cards is already quite high in both markets, mobile broadband still has a fairly low penetration rate of around 60% in Guatemala and 50% in El Salvador. In addition, 4G penetration is very low in Guatemala, at around 10%, and just 5% in El Salvador,” it added.

The ratings agency maintains an “A3” rating for América Móvil’s debt, with a stable outlook.

The decision by Telefónica to sell those assets also raises the possibility that the heavily indebted company might also look at selling at least part of its underperforming Mexico unit.

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