Telefonica Germany hit by falling post-paid ARPU

Telefonica Germany hit by falling post-paid ARPU

03 MAY 2013

Declining ARPU from its post-paid customers helped squeeze revenues at Telefonica Germany’s mobile operations (O2), which fell by 3.3 per cent to €733 million for the three months ended 31 March.

As contract customers have sought cheaper tariff deals in an increasingly competitive market, post-paid monthly ARPU slumped by 9.5 per cent, to €19.3, compared with Q1 2012.

Overall ARPU, which includes pre-paid customers, fell by 7.1 per cent, to €12.5.

Regulatory pressures have taken their toll, too. Recently-listed Telefonica Germany is keen to point out that, were it not for cuts in mobile termination rates (MTRs), year-on-year wireless revenues would have increased by 0.5 per cent during Q1, rather than fallen.

More encouragingly for shareholders, mobile data revenue is growing steadily, reaching €354 million during Q1, up 5.5 per cent year-on-year.

And as a result of increased smartphones penetration, non-SMS data revenues grew by 24.1 per cent year-on-year. Non-SMS traffic now generates 63.4 per cent of mobile data revenue, up 9.5 points.

Handset revenues reached €180 million, a year-on-year increase of 23.5 per cent. An increasing mix of high-end smartphones sold has helped here. By the end of Q1 2013, 27.9 per cent of O2’s customers were smartphone users, compared with 21.1 per cent a year ago.

As of 31 March 2013, Telefonica O2 had 19.3 million mobile subscribers, up 3.9 per cent. Of that number, 10.2 million were post-paid, up a healthy 7 per cent.

When including its fixed-line operations, total Q1 sales at Telefonica Germany fell by 2.3 per cent, to €1.23 billion.

The Germany operation as a whole managed to slightly increase its operating income margin, from 22.3 per cent to 22.6 per cent. But operating income before depreciation and amortisation fell 0.7 percent, to €278 million, which, according to a Reuters report, missed average analysts’ expectations of €293 million.

In separate news, Telefonica Germany has signed a Memorandum of Understanding with Deutsche Telekom to access the high-speed fixed-line network of the incumbent.

“High-speed internet is the future,” said René Schuste, Telefonica Germany’s chief executive in a statement. “Together with our heavy duty mobile data network, we will be able to further advance our convergence strategy.”

Telefonica Germany, which is 79.86 percent-owned by Telefonica, was listed on the Frankfurt stock exchange late last year.

The Telefonica Group will announce its Q1 2013 results on 8 May.


Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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