Hi (OIBR3) should generate revenue of R$ 15 billion, says Rodrigo Abreu

Hi (OIBR3) should generate revenue of R$ 15 billion over two to three years, says Rodrigo Abreu
Hi: Cristiane has more than 30 years of financial experience in large national and multinational public and private companies. Photo: Disclosure

The new Hi (OIBR3) should be able to generate revenue of R$ 15 billion within two to three years, according to the company’s CEO, Rodrigo Abreu.

In a virtual event promoted by XP on Wednesday (08), the executive spoke about the objectives of the new hi. Second Rodrigo Abreu, with the structural separation of the infrastructure unit and the closing of the mobile operation, the focus of business will be on customers, services and customer service.

In the projection of R$ 15 billion in revenue, Abreu did not consider the portion of infrastructure that Oi maintains, V.tal. THE V.tal is the trade name of InfraCo, a company that brings together the operator’s fiber optic infrastructure.

In July, Nova Oi sold 57.9% of InfraCo’s capital by accepting a joint offer of funds from BTG Pactual (BPAC11) and from globenet Submarine Cables, in the amount of R$ 12.93 billion.

According to the director, the expectation is that by the first quarter of 2022, Oi will conclude the sale of the mobile operation, as well as the control of the infrastructure unit.

“The company is in a transition phase, with a new phase emerging with the closing of the mobile operation and completion of the infrastructure control. It is a structural change”, he stated at the event.

Future of Nova Oi

Nova Oi’s idea is to isolate all fixed copper telephony and migrate to optical fiber. When talking about broadband, Abreu said that the company has expanded its ultra-broadband market in recent years and sees great potential for fiber growth in the country.

“The company’s market share in cities where this service was available jumped from 4% in the first quarter of 2019 to 24% in the second quarter of 2021,” he said.

According to Abreu, Nova Oi is not just the operation left over from the divestment processes, but what the company can become with its participation in V.tal.

He calculates that there is the ability to generate a margin of 40 to 50% of the V.tal’s Ebitda (which should be up to R$ 60 billion, according to the executive), with multiples of 10 to 15x. This should be an important factor to generate more value back to Oi.

In addition, V.tal has the possibility of offering revenue growth as well, according to the executive. This should be taken into account, he believes, by the market.

O investment in V.tal it will be BRL 30 billion in five years, not including 2021. In practice, this results in an average investment of BRL 6 billion per year, starting next year, the executive pointed out.

End of mobile operation

Nova Oi and V.tal shall not participate in the 5G auction for the 3.5 GHz band. The information is from the CEO of telecommunications company.

The Oi executive explained that it is not worth participating in the auction of this frequency. “The operator’s mobile operation is practically closed, awaiting regulatory approval,” said Abreu.

About the 5G auction, market experts explain that the 3.5 GHz band is the main harmonized average band, on a global basis, for the use of 5G technology. Through this band, data will be transmitted at ultra speed from cell phones and computers to communication towers.

However, as the company’s mobile operation has already been sold to Claro, Tim and Vivo, and is awaiting Cade’s approval, Abreu disregarded the possibility of joining the offer of this frequency.

Regarding the other frequencies, the executive revealed that the Hi sees potential to participate in the 5G auction, as does V.tal.