Amid the consolidation of the internet market, Brazilian internet service provider (ISP) Alares wants to be seen as a buyer, not a seller.
“Alares is a protagonist in this group and we will continue to be integrated in this market,” CEO Denis Ferreira told BNamericas.
The group, which is one of the 10 largest ISPs in the country in terms of fiber access, is planning new M&A and betting on the company’s share as a driver of growth.
The company has just announced a new brand, Alares Empresas, under a reformed strategy to tackle the sector, where competitors such as Americanet (now called Vero) are doing well. Brasil TecPar is another ISP that is shifting its focus to B2B.
About 5% of Alares’ current customers are B2B customers, which together represent about 10% of the company’s revenue. Alares operates in 180 cities across seven Brazilian states.
B2B’s focus will be mainly on the retail market, providing energy to third parties with fiber backbone, as well as services for small, medium and large companies, said Ferreira.
The backbone of the Alares country is more than 23,000km and, according to the official, recently underwent a process to increase the capacity. CEOs are refusing to rely on neutral networks to expand the company’s infrastructure.
As for greenfield growth, he sees the market moving sideways again in terms of the rollout of fiber in 2024.
“I don’t see the market doing as big as it did in the past in terms of fiber deployment. Companies, including ours, are now focusing on growing where they are already, adding customers to the deployed network and increasing ARPU,” he said.
Major suppliers of Alares network equipment are ZTE, Zyxel Networks, Huawei and Nokia. Alares payroll and CRM was developed by the local company Interfocus and its ERP by Brazil’s Totvs.
At the beginning of June, Alares completed the integration of all its systems into a single network operator center (NOC). The site is located in Ourinhos in the state of São Paulo.
Ferreira did not specify capex, but said that the NOC’s investment was “significant” and that most of the money went to infrastructure and staff.
M&As
Working in M&As, Alares last acquired Webby in October 2023. Since then, the company has been focusing on complete integration, including office, systems and staffing.
With this process now complete, the next step is to remove the Webby version and install Alares.
Ferreira did not comment on the company’s new M&A, but said the company is looking for opportunities and hinted that new acquisitions could be announced before the end of the year.
Despite intense competition and a “price war,” Alares has been gaining customers month after month since last year, not counting acquisitions, he said.
However, he said the price war is disrupting the market.
“It is not good and it causes financial problems, especially for companies that have a big problem. If you have a big risk and lower prices, you will have big problems,” said the official.
STRENGTHENING
The fiber broadband market is going through a new wave of M&As. In 2023, two important players, Vero and Americanet, announced a merger.
Also last year, as first reported by BNamericas, Ligga, the largest ISP in the state of Paraná, began negotiations with V.tal, which includes Oi and funds linked to BTG Pactual.
Recently, Telefônica admitted that it is in talks to acquire Desktop, the largest ISP in the state of São Paulo. Market sources say the acquisition has been finalized, but has yet to be announced.
All of this activity between powerful and established players comes alongside the takeover of small ISPs by large companies, which has been happening for some time now.
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