A Hey will live a startup life from now on. The business will be high-growth, according to the three-year plan just announced, and totally light on assets, as the company is in the final phase of its R$34.6 billion divestment program. Of the various assets sold, mobile operation and control of the fiber network were the largest, totaling more than R$29 billion.
This year, the company’s revenue from the sale of fiber services should reach R$ 3 billion. But the company’s plan predicts that this total will reach R$9.3 billion in 2024.
In the new life of tele, the company will be focused on customer service, that is, on telecommunications retail. The infrastructure will be in the hands of other competitors. In the case of the fiber network, tele, however, will continue as a minority shareholder in the network company, InfraCo. This unit had the control sold to the fund BTG Pactual Real Economy, managed by the institution, with funds from investors. In this case, at the same time, Oi will be a client of this company (which will be part of its cost), but it will also participate and receive part of the results – as it will have a 42.1% share of the business.
The president of Hi, Rodrigo Abreu, is currently presenting the company’s project for the triennium 2022 to 2024. In the revamped version of the company, tele will position itself as a company totally oriented by data and will promote, at the same time, changes in the relationship and user experience, as well as on a cost basis. The total revenue projected for 2024 varies from R$ 14.8 billion to R$ 15.5 billion, with Ebitda between R$ 1.9 billion and R$ 2.3 billion.
The numbers are equivalent to an expressive growth, since the net revenue of what would be the new Oi, without considering the cellular operation, therefore, was R$ 2.2 billion. It is the first time that the tele shows in such detailed levels its estimates for its new version, after the end of the judicial recovery process and sale of assets. At the end of the day, the company will be a kind of retail tech telecommunications services, with some more “old economy” components, with a strong customer service and field strength.
On the new services front, nova Oi hopes to achieve revenue of BRL 1 billion in 2024. The executive listed how the company can achieve important revenues even with very small shares in large markets such as online retail, payments, content, logistics, games, telemedicine and digital home.
The expectation is that, even after disconnecting from almost 40 million customers from the cellular operation and the TV base (whose sales have not happened yet), Oi will arrive in 2024 with 50 million revenue-generating units, or customers. Not by chance, Abreu made a point of comparing himself to the whooping of technology and the new economy. It has positioned its base against the 17 million customers of Netflix in Brazil and the 40 million users of the Nubank.
On the cost front, the new Oi, in 2024, should have a base equivalent to about 67% of the current total. The savings are the result of releasing the costs of several operations sold, as well as expected efficiency gains. There is a forecast, according to Abreu, of savings in excess of R$ 1 billion with improved management.
In addition, the company expects improvements in the cost structure as a result of the revision of the concession model to the authorization model and highlighted that the arbitration process against the State, the Federal Government, can yield relevant resources, but provide guidance on potential values. Tele is not the only one suing the government. Vivo and Claro have just signed with the National Telecommunications Agency (Anatel).
InfraCo’s pot of gold
Abreu highlighted the value he estimates for the fiber company, which will be controlled by the equity fund managed by BTG Pactual. The expectation is that the fiber capacity sales operation will go from generating an Ebitda of BRL 1 billion this year to BRL 5.4 billion in 2025. This expectation means that InfraCo would have a company value ( which includes net debt) of R$54 billion.
Abreu drew attention to what this could mean for Oi in a very simple way. He highlighted that the company’s share would have a company value equivalent to R$22 billion. Oi today has a market capitalization of R$9.3 billion and a company value (with debt) exceeding R$38 billion, according to data from Yahoo Finance, without having ‘disconnected’ the assets sold. Transactions wait for the final endorsements needed to be executed.
It is worth remembering that the fiber company has an intense investment program for the coming years, of tens of billions, which should lead the company to reach 32 million homes in 2025. Oi should end this year with 15 million homes past.
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