Morningstar Rating

Stock Research and Analysis

by Imari Love

Bulls Say

Oi has done a solid job of improving its competitive position with higher-end customers, evidenced by its increased share of new postpaid additions.
Further mobile termination rate cuts are inevitable (likely 15%-20% a year), but Oi is a net payer, so unlike its peers, the cuts are favorable.
Oi has the largest fixed-line backbone in Brazil. It also launched a satellite TV service last year and has expanded its subscriber base at a very fast clip. Read more 

Bears Say

Oi has cut its dividend outlook for 2013-2014 by 66% given liquidity concerns and weak first-half earnings.
Nearly 70% of the firm's revenue comes from a wire-line business that is in a secular decline due to fixed-to-mobile substitution.
The firm's mobile average revenue per user, or ARPU, has been declining as heightened competition pressures pricing. Read more 

Management

In June 2013, Zenial Bava was named CEO--taking over for Jose Mauro Mettrau Carneiro da Cunha, who has assumed his former position as chairman of Oi's board. Bava resigned his position as a member of Oi's Board. Bava was appointed CEO in 2008 and was   Read more 

Profile

After the purchase of Brasil Telecom, Oi now has nearly 19 million lines in service, making it the largest fixed-line provider in Brazil. Its wireless operation, Oi Movel,  Read more 

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