Most analysts are still recommending investment in Brasil Telecom (BRTO4 and BRTP4), but discomfort is clearly mounting. One reason is the fact that BrT has submitted bids for PCS leftovers in the ongoing auction. The other is the conspicuous lag between BrT and the other ILECs in terms of EBITDA margin. In seven days, stock in the holding company and operator lost 10.31% and 8.32% and is down 2.23% and 13.38% in the year respectively. As for the PCS auction, analysts can?t see why BrT delivered envelopes, due to be opened on November 19, because if it enters the wireless market (impossible until late next year anyway for regulatory reasons) Opportunity won?t be able to keep its promise to let Telecom Italia back in. This would spark another crisis of confidence with repercussions for Telemig Celular. With regard to EBITDA, analysts want to know why Brasil Telecom reported a margin of only 47.2%, well below those of Telefonica (53.7%) and Telemar (48.7%) even though unlike BrT the other two ILECs both invested heavily in early achievement of regulatory targets. BrT?s delinquency rate is also lower than theirs, and the maintenance cost of its coverage area is one of the lowest in Brazil. ?It?s a mystery,? an analyst with a brokerage house that trades actively in telecoms told TELETIME News. ?The only way to find any answers is to take a close look at the financial statements of all BrT?s suppliers.? BrT has outsourced installation, maintenance and call centers to suppliers. The question is whether their costs are higher than the competition?s.
Administration
