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Telefonica Brasil to expand ultra-fast broadband to 20 new cities

A logo at the Brazilian mobile operator Telefonica office, that is no longer in operation, is seen in Sao Paulo, Brazil December 21, 2017. REUTERS/Leonardo Benassatto

By Gram Slattery

SAO PAULO (Reuters) - Telefonica Brasil SA will expand ultra-fast fiber-to-the-home (FTTH) broadband service to more than 20 new cities in 2018 as Brazil's largest telecommunications firm eyes ambitious growth among wealthier clients, a top executive told Reuters.

Chief Operating Officer Christian Gebara said in an interview that the number of homes with access to the company's FTTH network will more than double to almost 15 million in the next three years from the current seven million.

"Today, we have 87 cities, and when we talk about the number of homes passed today, we're talking about 7 million. Our estimate for the next three years is to more than double this number," Gebara said at Telefonica Brasil's headquarters in Sao Paulo.

Telefonica Brasil, which operates under the Vivo brand, is among a number of telecoms firms in Latin America's largest economy focusing on fixed-line broadband as the mobile market becomes saturated.

In March, Vivo released its 2018-2020 strategy plan, forecasting 26.5 billion reais ($7.8 billion) in investments. The plan emphasized FTTH expansion, in which fiber goes all the way into the customer's home, significantly improving data speeds.

About 2.5 billion reais is already earmarked for broadband, and Gebara said another 5 billion reais would likely be dedicated to that segment.

Vivo is already moving into new markets and going head to head with local broadband firms, Gebara said. The company will also examine possible acquisitions.

"Our plan is an organic plan, but if we find out that there is a great opportunity in one of these cities, we're going to consider it," he said. "So far we haven't seen it, but part of our plan could be addressed by an inorganic operation."

Among the broadband players in Brazil currently for sale is the telecoms unit of Cia Energetica de Minas Gerais SA, known as Cemig, sources have told Reuters.

Gebara said while the unit was not a total match with Vivo's FTTH strategy, Vivo was taking a serious look.

"Of course we are looking at it closely," he said. "Not only Cemig, many other big ones that may appear on the market as well."

(Reporting by Gram Slattery; Editing by Jeffrey Benkoe)