SAO PAULO: Telefonica Brasil, a unit of Spain’s Telefonica SA and one of the largest telecommunications operators in the South American giant, said in a securities filing that it plans to invest at least 25 billion reais (some $7.1 billion) between 2015 and 2017.
Telefonica Brasil said it plans to invest 8.4 billion reais (some $2.4 billion) this year and 8.8 billion reais (some $2.5 billion) in 2016.
“Initially, the projected investment total for the 2015-2017 triennial will not be less than 25 billion reais,” the filing said.
The projected investment outlay still requires the approval of Telefonica Brasil’s board of directors and could be modified “due to eventual changes in (the country’s) business and macroeconomic climate,” the company said.
Telefonica Brasil said last month that it invested 3.8 billion reais (some $1.1 billion) in the first half of 2015, an increase of 7.5 percent compared with the same period of last year.
The company said then that its investments are focused on boosting 3G capacity and expanding its 4G coverage and transmission infrastructure.
Telefonica SA’s biggest investment in recent months was its acquisition of Brazilian broadband provider GVT from France’s Vivendi.
The Madrid-based company agreed to pay Vivendi 4.66 billion euros (some $5.14 billion at the current exchange rate), including debt assumption, and hand over 12 percent of the share capital of the new Telefonica Brasil resulting from the deal.
In addition to GVT, Telefonica Brasil also comprises Vivo, the leader in Brazil’s wireless market with a nearly 30 percent share; a fixed-line operator in Sao Paulo state formerly known as Telesp; and different Internet and pay TV companies.
The company unveiled its three-year investment plan amid an economic contraction that has begun to have an impact on the telecommunications sector, whose revenues could fall between 3.8 percent and 6 percent this year, according to some projections.
Brazil’s economy, which grew just 0.1 percent last year, could shrink as much as 2 percent in 2015 and remain in recession in 2016 with a further contraction of 0.15 percent, analysts say.
