Telefonica chief Jose Maria Alvarez-Pallete (pictured) said the company’s Q1 numbers “reflected a further step forward in our business model, which is focused on the pursuit of sustainable growth”.
Net income for the quarter of €779 million was up 42.2 per cent year-on-year, on revenue of €13.1 billion, up 5 per cent. On an organic basis, revenue increased by 1.5 percent, with a 1.7 per cent increase in service revenue (despite regulatory impact) to €12.2 billion.
The company ended the period with 274.1 million mobile customers, of which 40.7 per cent were contract subscribers. LTE subscriber numbers of 75.5 million made up 29.1 per cent of the total.
In its home market Telefonica said its results reflect the growing penetration of high-value services, but the year-on-year comparison was impacted by the phasing of tariffs and promotion upgrades. Revenue of €3.1 billion was down 2.6 per cent on an organic basis.
The company “maintained solid operational momentum” in Germany, noting a “continued strong performance of partners while the competitive environment showed further signs of improvement across segments”. Revenue of €1.8 billion was down 4.7 per cent, although the company noted an improving trend sequentially, after revenue dropped 6 per cent year-on-year during Q4 2016.
Telefonica saw increasing numbers of users, and revenue and operating income growth in the UK, underpinned by increased ARPU and “leading levels of loyalty”. Revenue of €1.6 billion was up 2.1 per cent year-on-year.
For Brazil, the company “recorded an acceleration in revenue mainly driven by the positive performance of mobile services”, which, alongside a reduction in operating expenses, enabled it to maintain growth in margin and cash flow. Q1 revenue of €3.2 billion was up 1.6 per cent year-on-year.
Revenue from Telefonica’s other LatAm businesses of €3.3 billion was up 9.2 per cent. It noted a strategic focus on capturing value translated into strong growth in ARPU.
The company cited the launch of Aura as a highlight of Q1 2017, describing the platform as: “a new, more innate and simple customer relationship model, a pioneer in the area of cognitive intelligence”.