RIO DE JANEIRO (Reuters) - Brazilian telecom group Oi (OIBR3.SA) (OIBR4.SA) will get “very aggressive” to keep its client base and catch up with competitors in the country’s hotly contested wireless market, Chief Executive Francisco Valim said on Wednesday.
Oi is Brazil’s largest fixed-line carrier but it has struggled to hold on to its share of the wireless market, in which it competes with Telefonica Brasil (VIVT4.SA), an arm of Spain’s Telefonica (TEF.MC), TIM Participacoes (TIMP3.SA), the local unit of Telecom Italia (TLIT.MI), and Claro, owned by Mexico’s América Móvil (AMX.N).
The company announced an ambitious plan last month to boost investments and operating profit by 2015 and Valim said it is on track to meet its outlook despite a weaker Brazilian economy.
“Current economic conditions do not change the scenario we have been forecasting,” Valim told the Reuters Latin America Investment Summit in Rio de Janeiro.
“We actually see growing demand for the services we are offering, because the (entertainment) alternatives became more expensive,” he added, noting that clients are more likely to stay home watching television and surfing the Internet when economic conditions worsen.
Oi intends to stem the loss of revenue in its fixed-line business by offering bundled services of voice, cable TV and broadband Internet to the 14 million households it serves in all Brazilian states but Sao Paulo.
“We’ve already stopped losing fixed-line clients in several regions of Brazil,” Valim said, without elaborating further. “That’s a key trend change.”
In the mobile business, Oi plans to extend its 3G network to 80 percent of the Brazilian population by year-end, catching up with its competitors, Valim said. Currently, Oi’s 3G network reaches 65 percent of the population.
Oi will bid at a June 12 auction of 4G frequencies in Brazil, and Valim anticipates other major telecom companies will do the same.
But development of the new 4G network will probably be off to a slow start as Oi remains committed to investing in the cheaper 3G technology, which still has room to grow, he said.
Oi also plans to sell nonessential real estate assets to help cut its 17.5 billion-reais ($8.7 billion) debt load even as it invests 6 billion reais annually through 2015.
An internal study to determine which assets can be sold should be ready in the second half of the year, Valim said. He did not specify how much money Oi can raise with the sales.
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($1 = 2.01 Brazilian reais)
Additional reporting by Walter Brandimarte; Editing by Phil Berlowitz