Summary: Oi S.A.

Third-largest telecom operator in Brazil, although its market share is slipping due to underinvestment in the past several years; Reduced 4G and fiber to the home/fiber to the curb (FTTH/FTTC) coverage, and lower average revenue per user (ARPU) than those of peers; and Large footprint domestically. Highly leveraged capital structure despite an almost 50% debt reduction at face value in restructuring; Aggressive capital expenditures (capex) plans, resulting in free operating cash flow (FOCF) deficits of R$4 billion - R$6 billion through 2020; Committed capital injections for up to R$4 billion before the year-end; Long-term debt maturity profile; and Improved corporate governance. The stable outlook reflects the challenges Oi will face in implementing its investment program, and consequently recovering its market

...Business Risk: Weak Financial Risk: Highly leveraged + Third-largest telecom operator in Brazil, although its market share is slipping due to underinvestment in the past several years; + Reduced 4G and fiber to the home/fiber to the curb (FTTH/FTTC) coverage, and lower average revenue per user (ARPU) than those of peers; and + Large footprint domestically. + Highly leveraged capital structure despite an almost 50% debt reduction at face value in restructuring; + Aggressive capital expenditures (capex) plans, resulting in free operating cash flow (FOCF) deficits of R$4 billion - R$6 billion through 2020; + Committed capital injections for up to R$4 billion before the year-end; + Long-term debt maturity profile; and + Improved corporate governance....

Summary