THE Claro Participations released their financial results for the 2nd quarter of 2021: the operator recorded an increase of 2.1% in net revenue and increased the base of mobile customers with postpaid plan. The tele also unveiled the fiber optic strategy and celebrates the sales performance of the Clear Box TV.
Claro – 2nd Quarter 2021 Financial Results
Check out the main highlights for the second quarter of 2021 and the comparison with the same period of the previous year:
|Indicator||2Q 2021||2Q 2020||Difference|
|Total net revenue||BRL 9.81 billion||BRL 9.6 billion||+2.1%|
|mobile revenue||BRL 4.26 billion||BRL 3.84 billion||+10.8%|
|Fixed revenue||BRL 5.11 billion||BRL 5.43 billion||-6%|
|EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)||BRL 4.04 billion||BRL 3.93 billion||+2.9%|
Unlike competitors Vivo, TIM and Oi, Claro is not publicly traded in Brazil, and therefore does not disclose the net income to the market. EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 2.9% compared to the same period of the previous year.
Mobile service increased 10% in revenue
In the mobile segment, Claro celebrates the 10.8% growth in net revenue. The operator expanded its customer base, with a 22.9% increase in postpaid lines compared to the previous year. Most of these additions come from Nextel, whose accesses were officially integrated into the operator’s base in February 2021.
The mobile service has become increasingly important for Claro: of the operator’s total net revenue, 43.4% represents cellular line contracts. The operator also saw a 61.8% increase in revenue from the sale of handsets.
Claro ended the month of June with 67.7 million mobile customers and had a positive balance of 774 thousand lines in number portability during 2021. According to the most recent data from Anatel, 57.6% of mobile accesses in the tele use a postpaid or control plan (which are more profitable), while 42.4% of customers have a prepaid chip.
The operator provides cell phone service with its own network in 4,239 municipalities, of which 2,900 cities use 4G technology.
Fixed services revenue shrinks by 6%
If Claro’s mobile services had good results, the same cannot be said for the fixed segment: there was a 6% reduction in net revenue compared to the same period of the previous year.
Claro is the largest operator in Brazil in the broadband service. It maintains the leadership of fixed internet in 111 municipalities, and celebrates that 85.9% of the contracts have access speeds above 34 Mb/s.
In May 2021, Claro had 9.79 million broadband customers – around 60,000 more than in the previous year. However, other companies (especially small providers) had greater growth, which caused a reduction in the national share of the fixed internet market.
No mass migration from cable to optical fiber
According to teletime, Claro indicated that it continues to bet on its current infrastructure of coaxial cables to offer fixed broadband service, with no prediction of replacement of the HFC technology for optical fiber.
In new markets, Claro operates exclusively with optical fiber: its network with FTTH technology reaches 108 cities and has the capacity to serve 2.1 million homes (home passed). The tele is expected to reach 5 million homes by the end of 2021, which represents a bold goal of practically doubling the infrastructure.
Even so, coaxial cable remains predominant: Claro’s fixed network is present in 313 cities and has the capacity to serve 33.5 million homes. In other words: only 6.2% of coverage uses FTTH technology, which has greater traffic capacity (especially in upload speeds) and lower latency, without suffering from electromagnetic interference.
Meanwhile, competitors (Oi and Vivo) are investing in overlaying the copper network for optical fiber. In São Paulo, Claro has also started to switch from coaxial cable to FTTH in some regions, but it seems to be a kind of pilot project and serves few locations.
América Móvel CEO Daniel Hajj sees that small regional providers have grown a lot, but in regions where Claro does not operate with fixed services. In new markets, the operator has applied a very aggressive pricing policy with cheap plans and high speeds.
Claro Box TV reaches 122 thousand IPTV customers
In addition to fixed broadband, Claro is also a leader in pay TV. However, the numbers in this sector are falling considerably: in one year Claro had a reduction of around 850,000 pay TV customers.
As a bet to try to reduce disconnections, Claro launched in January a new service in the IPTV modality, which is classified as a Value Added Service and pays less taxes than conventional cable TV. The product has a cheaper price and is supplied through its own TV Box, installed by the customer.
For the first time, Claro announced the number of Claro Box TV customers: the service reached 122 thousand subscribers in the second quarter of 2021. There was a significant growth compared to the previous quarter, when there were 35.4 thousand accesses.
Claro has encouraged the adhesion to Claro Box TV and sells broadband combos with the IPTV box. The operator celebrates a “positive reception in the market”, but does not disclose the average expenditure per user of this product.
In June, the tele revealed that Claro Box TV represents 30% of all pay TV sales of the operator, and that customers contract an average of 1.7 to 1.8 additional services within the IPTV platform.