Poor economic conditions in Brazil and some mismanagement have pushed the company to dispose valuable assets such as its participation in PT, its stakes Africatel, its mobile towers, among others. Not only has this diminished the company’s income streams (some of the more valuable income streams have gone for now), but more importantly, this might not be sufficient to re-launch the company with the aim to stabilize and offset the impact of new regulations and its lacking strategy in customer migrations (to higher ARPU).
The group’s intention is to continue its investments in TV infrastructure and 3G / 4G networks; this is obviously absorbing all available FCF and impact negative company fundamentals such as EBITDA. Therefore it will deteriorate further its credit metrics and ultimately make the stock unattractive, for the time being, for investors.