Message from Management

The year 2021 was marked by the advancement of immunization against Covid-19, leading to a gradual return to pre-pandemic habits and activities.

During the period with restrictions, though, we realized that it was our industry’s mission to provide the conditions needed to ensure interaction and connectivity across the board in our society, which is a testament to the importance and resilience of Brazil’s Telecom infrastructure. Internally, the challenges found us prepared in a wide variety of activities, enabling us to provide quality service and solutions and finish the year with significant earnings. Our net revenues increased by 10.1% against the previous year, amounting to R$2.6 billion, and our recurring EBITDA hit R$1.1 billion, up 10% on that same comparable basis, with a 43% margin.

Rather than just an increase in demand brought about by the pandemic, these results reflect the assertiveness of our growth strategy. In B2B, we were agile at supporting customers with connectivity solutions and information and communication technology (ICT) solutions to support the growth of their online business in higher demand, as well as resources like cloud storage, which is so much needed for interaction between teams during a lockdown period. As for our residential customers (B2C), we were ready to provide optical fiber broadband services at high speeds, which technology represented 74.8% of our customers’ connections earlier in the year and finished 2021 accounting for 93.5%. The quality connection provided by our optical fiber network ensured our customers from remote work to distance learning to options in leisure and entertainment.

We understand that several habits developed during the pandemic are here to stay. Even as society is back out there socializing, we are living through a technological revolution that is on its way to making digital interactions more and more of a part of people’s routine. We are aware of these trends, and we are hard at work on new digital formats for our relationship with customers, as well as at modernizing your internal processes and developing new business models. At these two levels, our work involves thinking our changing world and seeking to meet society’s new needs. With that in mind, we expanded the scope of our relationship with Brain, a research and technology organization we have founded, by internationalizing it through partnerships with those in our ecosystem in Portugal.

Still in 2021, we made two key strategic moves. One was the acquisition of Vogel Telecom, which we planned considering its complementarity to our optical fiber network and the services we provide, leading to synergies that have had a remarkable impact on our business. Through Vogel, we expanded our network by 27,000 kilometers and added 3,400 corporate customers to our portfolio—in high-end areas in municipalities with a massive concentration of telecom markets in Brazil. The move was a key step in our expansion and geographic diversification strategy.

In parallel, with winning bids for seven frequency lots at the 5G Auction, Algar Telecom secured the broadest spectrum for this technology in our line of business, ensuring our customers have every condition to evolve in their digital lives. Our history is marked by a pioneering spirit and by innovation, so it was in keeping with tradition that we were the first operator to launch, as early as last December, 5G services at the newly purchased 2.3 GHz frequency in three of the major cities in our mobile operation.

Technologies are the means for us to provide what our customers really want: to be always connected and rely on the best connection experience both in their personal lives and at work. We are and will continue being a benchmark connectivity provider, simultaneously advancing in all our business segments (retail, corporate, wholesale) and working to meet our customers’ expectations.

All of our 2021 achievements are the result of the efforts and dedication of our nearly 5,000 associates, of exercising corporate governance up to the highest standards, of our commitment to ESG best practices, and of the assertiveness with which our operations and innovation teams go about their business, which provides the flexibility and boldness we need so we can always be at the forefront of quality and efficiency in our industry.

As we entered 2022, we were aware of the challenges facing the Brazilian economy in this period, which we expect to be the final stage of the pandemic. The basic interest rate hike to contain inflation has additional impacts on the growth of economic activities in a recovery scenario. On the other hand, Brazil’s high vaccination rates and the recovery in the service sector lead us to believe that perhaps we have the toughest period behind us. Lastly, we reiterate our belief in Brazil and our confidence in more positive and promising future prospects.