Acquisition of full control of FiBrasil increases flexibility for new deals, CEO says
07/29/2025
Telefônica Brasil’s recently announced acquisition of full control of FiBrasil aims to expand its fiber broadband reach to 30.1 million homes passed, CEO Christian Gebara told Valor, adding that the company is eyeing further acquisitions in the segment. Telefônica, which operates under the Vivo brand, posted net income of R$1.3 billion in the second quarter, according to results released Monday night (28).
“We’re still looking [at opportunities], but it’s clear we need to grow our network given the fiber potential in Brazil,” Mr. Gebara said. FiBrasil currently has 4.6 million homes passed with fixed broadband coverage. Including FiBrasil’s infrastructure, Vivo now reaches 30.1 million homes.
Telefônica estimates that Brazil’s addressable fiber broadband market comprises roughly 60 million homes, based on commercial viability. Founded in 2021, FiBrasil was originally a 50/50 joint venture with Canadian fund CDPQ. Telefônica paid R$850 million to acquire CDPQ’s stake, increasing its ownership to 75%. The remaining 25% remains with Telefónica Infra, a subsidiary of the Spanish parent company.
FiBrasil was designed as a neutral fiber network—open to all operators—but the model failed to gain traction in Brazil.
“This whole neutral fiber network model, with multiple clients, didn’t take off. Not just FiBrasil, but the market as a whole saw little demand from third parties beyond the anchor tenant, which in this case was Vivo,” Mr. Gebara acknowledged.
With full control of FiBrasil, Telefônica expects greater operational flexibility and access to synergies. “It’s time for us to take a more active role in managing this asset. We see opportunities for synergy and increasing network penetration,” he said. “FiBrasil’s current customer penetration rate is about 16%, while ours [Vivo’s] is over 24%.”
In the second quarter, Telefônica Brasil reported net earnings of R$1.3 billion, up 10% from the same period in 2024. Total revenue rose 7.1% to R$14.6 billion, driven by growth in postpaid mobile services (up 10.9% to R$8.2 billion) and fiber broadband (up 10.4% to R$1.9 billion), outpacing inflation, as calculated by the Extended Consumer Price Index (IPCA).
Earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled R$5.9 billion in the quarter, up 8.8%, with a margin of 40.5%—compared to 39.9% a year earlier.
Total costs excluding depreciation and amortization reached R$8.7 billion, up 5.9% year-over-year, mainly due to increased commercial activity.
Cost increases were partly offset by operational efficiencies and higher use of digital channels, such as PIX instant payments, which accounted for 44% of total collections.
Digital services and new business lines accounted for 11.2% of Telefônica’s trailing 12-month revenue as of June, up from 9.5% a year earlier—reflecting efforts to diversify revenue streams. “If we look at absolute values, B2C digital services—which account for three percentage points of the 11.2%—grew by 14.8%,” said Mr. Gebara. Meanwhile, corporate services grew by 31.3% year-over-year.
The operator ended June with a customer base of 116.2 million accesses, a 1.3% increase from the prior year. Postpaid subscriptions continued to grow, up 7% to 68.5 million lines.
When asked about a potential sale of Telefônica Brasil shares by the Spanish parent—a possibility raised by Spanish newspaper El Economista—Mr. Gebara said he did not know any such move.
“What I can say is that Telefônica Brasil remains a core asset for the group, along with Spain, Germany, and the UK. Brazil is a key contributor to the group’s performance in terms of both growth and cash generation. In 2024, we accounted for 23% of group revenue—even with the depreciation of the real—and 32% of the group’s EBITDA and operating cash flow,” he noted.
In late June, El Economista reported that the Spanish parent company was considering two options to finance acquisitions in Spain and elsewhere in Europe without increasing debt: a capital raise or the sale of a 20% stake in its Brazilian operations. Telefónica S.A. currently holds 77.13% of Telefônica Brasil.
*By Rodrigo Carro — São Paulo
Source: Valor International
https://valorinternational.globo.com/
