Restructuring costs take toll on Telefonica - Mobile World Live

Restructuring costs take toll on Telefonica

05 NOV 2019

Spanish giant Telefonica slipped into the red in Q3 due to the effects of restructuring costs, mainly in its home market, although strength in the UK and Brazil boosted its top line.

A net loss of €443 million was down from a profit of €1.1 billion in Q3 2018, which it put mainly down to provisions for restructuring costs totalling €1.9 billion, the bulk of which (€1.7 billion) related to its Spanish operation.

The costs relate to a plan unveiled in September to raise funds from tower assets and take measures to transform the make-up of its domestic workforce.

Revenue up
Despite the loss, revenue in Q3 increased 1.7 per cent year-on-year, to €11.9 billion, with sales up in major markets including Spain, Brazil, Germany and the UK.

Its Brazilian operations had the biggest growth, with revenue increasing 6.9 per cent to €2.5 billion, as an improved performance in mobile offset declines in its fixed business and regulatory impacts.

Revenue from its business in Spain grew more modestly, increasing 1 per cent to €3.2 billion, with the company pointing to an uptick in convergent customers.

Germany also grew modestly, with revenue up 1.9 per cent to €1.9 billion. Revenue from O2 UK grew 3 per cent to €1.8 billion, fuelled by handset revenue, increased MVNO gains and progress in a smart metering programme.

Across the group, total mobile customers dropped 3.1 per cent to 262.4 million.

Car deal
In the UK, the company also announced it struck an agreement to use its 5G network to test driverless cars in London from 2020.

Driverless and smart transport systems will be trialled on roads in Greenwich and the Queen Elizabeth Olympic Park, with O2 partnering with car manufacturers, self-driving technology companies, start-ups and public organisations.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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