Wall Street Journal | March 1, 2011 | Ruth Bender
PARIS—Vivendi SA is banking on its Brazilian telecommunication unit to continue to boost the company’s revenues this year, as the French entertainment conglomerate runs up against barriers to growth in Europe.
Europe’s biggest entertainment and telecoms group said Tuesday that adjusted net profit—which in part takes into account the effects of a one-time provision—rose 4.4% to 2.70 billion euros ($3.73 billion) in 2010. Non-adjusted net profit was up 165% at €2.198 billion, and revenue grew 6.4% to €28.88 billion in 2010, helped by the strong performance of GVT, its broadband-Internet business in Brazil. GVT’s 2010 revenues rose over 71.2% to €1.02 billion as the business expanded into 13 Brazilian cities.
Vivendi Chief Executive Jean-Bernard Lévy said that the Brazilian company could be a major driver of Vivendi’s growth in the coming years.
“GVT can make a difference in the long term,” Mr. Lévy said during a press conference. “The Brazilian market is growing fast…GVT can benefit from being part of Vivendi to undertake new initiatives.”
Vivendi invested in GVT two years ago in the expectation that Brazil’s burgeoning middle class would spend on services like broadband Internet and pay-TV. It has rolled out new products with the help of other Vivendi companies, which include record company Universal Music Group and computer game maker Activision Blizzard, to entice new customers. For instance, Vivendi’s pay-TV unit Canal Plus is working with GVT to launch a pay-TV offering in the second half of the year. Universal Music helped the Brazilian company create an online-music service. Mr. Lévy said GVT may launch a cell phone service in Brazil, though not before 2012.
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