Telefonica finds its way back to growth at home - Mobile World Live

Telefonica finds its way back to growth at home

06 NOV 2015

Telefonica’s domestic business, a perennial struggler, reported its first year-on-year quarterly revenue growth for seven years, while the group as a whole saw revenue rise by 11 per cent to €12 billion.

Revenue growth in Spain may only have been 0.2 per cent (1.3 per cent sequentially) but is significant for an operator which has fought to turn around a business in a sluggish economy.

The slight uptick in domestic revenue to €3 billion was greeted by the company as evidence of “seven years of intense business transformation”.

Telefonica credited its “high-value offer based on its differential assets, a more rational market in competitive terms and a more favourable macroeconomic context, with improvement in private consumption” as the factors behind its hard-fought recovery in Spain.

Germany
Another of the group’s major European markets, Germany, fared less well, reporting a year-on-year decline of 1.1 per cent in revenue to €2 billion.

Group performance
However, an improved domestic performance made only a small contribution to group-level revenue growth of 11 per cent. Assuming a constant exchange rate the increase was 4.8 per cent. The main growth drivers were mobile data, the Latin American business (which accelerated 12.6 per cent year-on-year), Brazil (5.2 per cent), alongside Spain.

Mobile data revenue grew by 19 per cent and now represents 44 per cent of total mobile service revenue, thanks to higher smartphone penetration and the growing number of LTE subscribers.

Non-SMS data revenue improved its growth rate to 27 per cent year-on-year (expressed organically) and represented 82 per cent of data revenues.

Overall net profit fell 1.9 per cent to €884 million.

Telefonica reiterated its guidance for 2015 and the dividend policy for 2015 and 2016.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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