Vivo earns R$1.34 billion thanks to fiber and postpaid internet | Telecommunications

Telefônica Brasil, owner of Alive, released the financial statement for the 2nd quarter of 2021. The company managed to reverse the fall of the previous period and had a 20.9% increase in net income and celebrates the milestone of 97 million customers of mobile lines, broadband, TV by subscription and fixed telephony.

Vivo store in São Paulo (Image: Felipe Ventura/Tecnoblog) (Image: Felipe Ventura / Tecnoblog)

Vivo – Financial Results for the 2nd quarter of 2021

Check out the main financial indicators for the 2nd quarter of 2021 and the comparison with the same period of the previous year:

Indicator 2nd quarter of 2021 2nd quarter of 2020 Difference
Net operating revenue BRL 10.6 billion BRL 10.3 billion +3.2%
Net profit BRL 1.34 billion BRL 1.11 billion +20.9%
Investments BRL 2.25 billion BRL 1.9 billion +17.9%
Number of customers (total accesses) 96.7 million 92 million +5.1%

Vivo grows in postpaid and prepaid in the 2nd quarter

The mobile service is Vivo’s flagship: its revenue grew 5.6% and reached the mark of R$ 6.9 billion. The operator maintained its share of the Brazilian cell phone market at 33%, and had an increase of 8.8% in the number of accesses.

In total, there are 80.9 million cell lines with a Vivo chip. Most of the contracts are postpaid, which accounts for 58.2% of the base. This modality generates greater revenue for the operator, since the user’s average monthly expense is significantly higher than in prepaid.

In one year, Vivo’s postpaid base grew 9.2%. On the other hand, prepaid also had a good performance with an increase of 8.2% in chips.

The tele also highlights that there was an increase of 118.9% in the Vivo Easy customer base, but does not detail how many lines were activated in the digital plan.

Vivo ended the month of June with mobile coverage in 4,869 cities, of which 3.9 thousand have 4G service and 4.7 thousand with 3G technology. 2G is present in 3,800 municipalities, but tele plans to turn off the standard thanks to a sharing agreement with TIM.

Fiber expansion improves Vivo’s fixed services revenue

In the fixed services segment, Vivo brought important advances: Vivo Fibra’s coverage grew almost 30% compared to the previous year and reached 17.3 million homes (home passed). There was also the addition of 17 new cities with FTTH technology, with a total of 293 cities served.

Regarding the number of customers, Vivo reached 4 million connected homes (home) with Vivo Fiber broadband. In addition, there are 919 thousand pay TV contracts via IPTV and around 1.2 million internet accesses with FTTC technology, the nomenclature used by the operator for the xDSL accesses of the former GVT.

Vivo Fiber (Image: Lucas Braga/Tecnoblog)

Vivo Fibra grows in the 2nd quarter of 2021 (Image: Lucas Braga/Tecnoblog)

The customer base with legacy technologies (traditional xDSL, fixed voice and DTH pay TV) still has a relevant representation compared to fiber contracts and accounts for 60.4% of all 15.7 million of Vivo’s fixed customers.

Even so, net revenue from legacy services represents only 32.7% of fixed segment revenue. Vivo Fibra had relevant growth, and the average monthly expense per user is higher compared to copper.

To continue growing, Vivo bets on the overlapping of copper and FTTC networks with pure optical fiber, but only in strategic regions that bring positive results. The operator needs to run with this strategy so as not to lose customers (especially those from the old GVT) to other operators such as Oi and regional providers.

Vivo Fibra’s coverage expansion plan bets on the neutral network FiBrasil, a partnership between Telefônica and the Canadian fund CDPQ. During the second half, the new company is expected to build FTTH coverage for 500,000 new homes; by the end of 2024, 3.9 million homes will be eligible for hiring.

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