Morningstar Rating

Stock Research and Analysis

by Allan C. Nichols, CFA

Bulls Say

Oi sold its Portuguese assets to Altice. It received EUR 5.8 billion in cash and is awaiting a final closing payment. This deal helped strengthen its balance sheet and may allow it to participate in the potential consolidation of the Brazilian telecom market.
As MTRs continue to decline, there is less of an advantage to keeping calls on a telephone company's own network, which benefits smaller operators like Oi.
Oi has the largest fixed-line backbone in Brazil. Its pay television service is growing rapidly with its subscriber base up 50% in 2014. Read more 

Bears Say

Oi has eliminated its dividend for at least 2015 and 2016.
Telefonica's acquisition of GVT enables it to offer a competing converged telecom service across most of Brazil.
To facilitate the PT merger, the firm did a massive rights issue that diluted Oi's shares without the benefit of lowering leverage. Read more 

Management

In June 2013, Portugal Telecom's CEO Zeinal Bava, also became the CEO of Oi. He replaced Jose Mauro Mettrau Carneiro da Cunha, who assumed his former position as chairman of Oi's board. With the fallout from Portugal Telecom's purchase of Rioforte,   Read more 

Profile

In Brazil, Oi now has about 15.1 million lines in service, making it the largest fixed-line provider in the country. Its wireless operation controls more than 50 million   Read more 

2014's Worst-Performing Stock We Cover: Oi 
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