PT results highlight value of Vivo

The value of Vivo to Portugal Telecom was laid bare in 2Q results, with the Brazilian mobile venture contributing to an 82% hike in profits at the European telco during the quarter.
Portugal’s incumbent said 2Q profits of €164 million were buoyed largely by Vivo’s revenues, which grew 35.6% to €1 billion and represented more than half the telco’s €1.9 billion revenues during the period.
The company recently sold its stake in Vivo parent Brasilcel to Telefonica for €7.5 billion following a fierce battle for control, and subsequently announced a deal to acquire 22.38% of Brazilian mobile carrier Oi for €3.7 billion.
Portugal Telecom and Telefonica are increasingly reliant on Latin America to offset a slowdown in business in their domestic markets.
Domestic revenues for the Portuguese incumbent slid 2.4% to €689 million during 1H10, as lower mobile revenues and equipment sales offset marginal growth in the firm’s fixed-line business.
It grew EBITDA 8.2% to €1.2 billion during the period – driven mostly by Vivo - giving it a group EBITDA margin of 35.2%.
Telefonica last week reported Latin American revenues grew 10.2% to €12 billion during 1H10.