Brazilian telcos' inflation-adjusted capex retreats to 2018 levels

Brazil's biggest telecom operators invested 38.1bn reais (US$7.54bn) last year, up from 35.5bn reais in 2021 on the back of 5G activations, according to latest data by industry association Conexis, which represents Telefônica Brasil, Claro, TIM, Oi, Algar and Sercomtel. 

When corrected by inflation, 2022 capex was down by some 500mn reais. In 2021, inflation-adjusted capex was 39bn reais. 

Excluding the year the pandemic started, last year’s inflation-adjusted investments were the lowest since 2017-18. 

In a statement, Conexis president Marcos Ferrari said that “changes are needed for these investments to continue increasing, and one of the main such change is the tax reform.”

The sector calls for a broad overhaul aimed at reducing the tax burden.

In 2017, the industry invested 38.1bn reais in real (inflation-adjusted) terms and 28.7bn reais in nominal ones.  

In the following year, these investments were 39.5bn reais and 30.8bn reais, respectively. After climbing to 40.7bn reais (real terms) and 33bn reais (nominal) in 2019, they tumbled to 37.2bn reais and 31.1bn reais in 2020, when the pandemic broke out.

“We are maintaining the necessary investments for the expansion of connectivity even in the scenario of revenue decline that we have seen in recent years. Gross revenue in real terms fell from 285bn reais in 2021, to 278bn reais in 2022”, Ferrari said.

Conexis reports show that gross revenue has been falling since 2013, when it peaked at 352bn reais (real terms). Conexis attributes the revenue drop mainly to a highly competitive market, in which "price ends up being a differential for winning customers."  

ACCESSES, ANTENNAS AND WORKFORCE

Brazil ended 2022 with 336mn fixed and mobile, broadband and pay-TV accesses. The number of fixed and mobile broadband accesses grew by 7.3%.

In February, 335mn accesses were in operation, according to latest data from regulator Anatel.

In December 2022, 87,600 antennas were in place, down 8.7% year-over-year, as Oi's mobile network (antennas included) was incorporated by Claro, TIM and Telefônica. 

As of March, 88,430 antennas were deployed.

By end-2022, the telecoms industry directly employed 522,000 workers, a reduction of 1.71%.