THE Hey announced this Thursday (5) the V.tal, a new brand from InfraCo, the company responsible for the neutral fiber optic network. Along with the new name, the operator announced a bold plan to bring broadband coverage with FTTH technology (fiber to the customer’s home) to 32 million homes by the end of 2025.
InfraCo’s new name is somewhat curious. “It’s pronounced ‘Vital’, with an ‘I’ that nobody sees, it’s hidden, but important to make everything work”, says Rodrigo Abreu, CEO of Oi. In fact, the new company should not serve end consumers and its existence should be hidden from most people: V.tal’s proposal is to provide connectivity to Oi itself and other companies, including operators, with the neutral network model.
Oi is currently an anchor customer of V.tal. If the deal with BTG Pactual is approved, the operator becomes a minority partner with approximately 42% of the shares, while the bank will retain control. The company is already born with a portfolio of 260 contracts with regional providers in the wholesale model, in addition to other companies that use the neutral network to bring broadband internet to customers’ homes.
With the change, V.tal consolidates itself as a new company, with its own CNPJ, headquartered in São Paulo and a committee to ensure neutral governance, administration and commercial operation processes during Oi’s transition – a practice known in the market as chinese wall, or “Chinese wall” in good Portuguese.
V.tal must invest R$30 billion to expand optical fiber
V.tal’s current network is not unimportant: there are more than 400 thousand km of fiber, with infrastructure reaching 2,300 cities. Oi expects to end 2021 with the capacity to serve 14.8 million households (home passed) with fiber optics in 228 municipalities, and forecasts that coverage will reach 32 million homes by the end of 2025. It is more than Vivo has today: the competitor is a leader in fiber and has 17.3 million homes passed with the technology.
The plan foresees investments in the amount of R$ 30 billion, which should bring fiber optic coverage to the home (FTTH) to more than 2,300 municipalities – here it is worth mentioning that the current network already reaches this number of cities, but only with a network of access (backhaul) and without infrastructure to provide broadband with fiber to the final consumer.
This neutral network must serve both Oi and other providers, who must pay a kind of rent for each connected customer. V.tal will offer the service in two modalities, each with its own price: the first one involves the complete connection, including the company’s own technicians to install the service in the customers’ homes; the second form includes only the last mile, and the provider must be responsible for the installation process.
An important detail is that Oi, as an anchor customer, may have exclusivity to operate in new regions for a short period (and not mentioned by the company). Abreu guarantees that this privilege does not occur because the operator is a shareholder, but because it has a relevant usage contract, and other operators can also be V.tal’s anchor customers in certain locations.
Hi wants to have 8.1 million fiber customers by 2024
Oi informed in its strategic plan that it wants to reach the mark of 8.1 million Oi Fibra broadband customers by 2024. This is a bold number: the operator plans to end the current year with 3.5 million customers in a network with 14.8 million homes, which results in an occupancy rate – the proportion between connected homes and homes suitable for hiring – of 23.4%
To achieve this goal while maintaining the same occupancy rate, Oi would need fiber coverage for 34.4 million homes by 2024. This number is higher than the 32 million homes opened by V.tal by the year 2025.
If it counts exclusively on V.tal’s network and does not use other neutral operators or build its own network, Oi will need to be more aggressive with its plans and offers to increase the network’s occupancy rate. The tele forecasts that the average expenditure per fiber optic subscriber with the operator will be R$94 per month until 2024; the operator’s current basic package offered in most locations costs R$99.90 per month in automatic debit with 200 Mb/s internet and unlimited landline.