Telefônica Brasil's Q2 2025: Unraveling Contradictions in Concession Migration, Acquisition Synergies, and Mobile ARPU Trends

Concession migration and asset sales, synergies from FiBrasil acquisition, mobile ARPU trends, cost control and margin expansion, and margin expansion and operating expenses are the key contradictions discussed in Telefônica Brasil's latest 2025Q2 earnings call.



Revenue and Profitability Growth:
- Telefônica Brasil S.A. (Vivo) reported total revenue of BRL 14.6 billion in Q2 2025, up 7.2% year-over-year.
- This growth was driven by strong performance in both mobile services and fixed revenues, particularly in postpaid and fiber-to-the-home (FTTH) segments, which now account for over 72% of service revenues.
- The increase is also attributed to the strategic focus on high-value offerings and service convergence, with postpaid mobile services growing by 10.9% and FTTH revenues by 10.4%.

Cost and CapEx Efficiency:
- EBITDA grew by 8.8% year-over-year with a margin of 40.5%, reflecting disciplined cost management and operational efficiency.
- CapEx optimization was evident with the CapEx-to-revenue ratio declining by 0.7 percentage points year-over-year to 14.8%.
- This efficiency is due to focused investments in high-return initiatives such as 5G and fiber expansion, driving future-proof results.

Fiber Expansion and Strategic Acquisitions:
- Vivo expanded its fiber network to over 30 million home passes, and connected homes grew by 12.6% year-over-year, reaching 7.4 million accesses.
- The acquisition of a 50% stake in FiBrasil is expected to consolidate fiber leadership and unlock synergies.
- This strategic move is aligned with Vivo's goal to continue fiber expansion and leverage existing network infrastructure.

B2B and Digital Service Growth:
- B2B revenues grew by 13.3% over the last 12 months, with digital B2B revenues increasing by 31.3% to represent 8.2% of total revenues.
- The growth is attributed to cloud, IoT, and messaging services, enhancing Vivo's leadership in connectivity and portfolio diversification.
- There is room for further growth through increased penetration of digital services among Vivo's B2B customer base.