Telefonica announced encouraging results for the third quarter of 2016, but its actions to reduce debt were again firmly in the spotlight.

It has now decided to modify its dividend policy, in a move chief Jose Maria Alvarez-Pallete said will “strengthen the balance sheet and intensify the organic deleverage, maintaining an attractive shareholder remuneration”. The company’s net debt stood at €50 billion in September 2016, down by €2.6 billion from June 2016.

A plan to raise cash through a list of Telefonica’s infrastructure unit – Telxius – has been shelved, with a listing of its O2 UK business also apparently in the pipeline.

The Wall Street Journal noted that as Telefonica has been maintaining its dividends, there have been some “high-level beneficiaries” – namely shareholders BBVA and CaixaBank, which are also represented on the Telefonica board.

While the debt issue is long-standing, operationally there are some good signs for Telefonica. Service revenue in its home market (Spain) was stable at around €3.05 billion, with strong growth for its Fusion converged services proposition.

Revenue in Brazil increased by 7.9 per cent to €3 billion, driven by strength in its mobile operation. In a statement, Telefonica said that “the execution of the data centric strategy, the focus on higher value customers (mobile contract and high speed broadband), the cost control and the commercial rationality, foster this excellent performance despite the inflationary pressure and the regulatory impacts”.

But revenue in Germany decreased by 5.2 per cent to €1.9 billion, with mobile service revenue down 1.8 per cent to €1.4 billion. The company noted mobile service revenue was impacted by regulatory effects.

Telefonica UK revenue decreased 17.1 per cent to €1.7 billion. According to Reuters, citing Telefonica UK chief Mark Evans, a listing of this business will take place next year – if market conditions are right.

And for the Latin America unit, revenue dropped 13.9 per cent to €3.1 billion, with the company noting the “highly competitive environment in the region” and difficult macroeconomic situation in some countries.

On a group level, Telefonica reported a net profit of €983 million, up 38.5 per cent year-on-year, on revenue of €13.08 billion, down 5.9 per cent. Operating income before D&A of €4.2 billion was down 1 per cent year-on-year.

It ended the period with 274.9 million mobile customers, with LTE penetration at 22.1 per cent group-wide.