Telefonica has reported a strong growth in net-income for the third quarter to 30 September 2010, which was flattered by “the value unlocked at Vivo following the acquisition of a 50 percent stake in Brasilcel held by Portugal Telecom.” For the period, net income for the group was EUR5.06 billion, up 168.7 percent from EUR1.88 billion, on revenue which climbed 7.3 percent to EUR15.23 billion from EUR14.19 billion. The company gained EUR3.76 billion during the period through the revaluation of its existing Vivo stake to reflect the price paid to Portugal Telecom for its holding – one analyst noted that the more Telefonica paid for the additional Vivo stake, the more this improved the value of its existing holding. The results were not without downsides: observers noted the weak performance in Spain, where revenue fell because of “stiff competition” and a weakness in the economy as a whole. Growth in Telefonica’s O2-branded business was driven by revenue increases in the UK and Germany, more than offsetting losses in Ireland and the Czech Republic. The quarter also saw a EUR61 million gain from the sale of Manx Telecom.

Across its subscriber base, Telefonica now has 214.85 million mobile customers, up 4.4 percent from 205.88 million year-on-year. Contract customers represented 31.1 percent of the total, although contract subscriber additions are outpacing prepaid growth: in the third quarter, contract subscribers accounted for 64 percent of organic subscriber gains, compared with 34 percent in the third quarter of 2009. Perhaps somewhat surprisingly, the company notes that it already has more mobile broadband customers (19 million) than fixed broadband subs (16.7 million), with mobile broadband also growing more quickly – 73.4 percent year-on-year, compared with 26.5 percent. The company also noted that this year it has invested EUR1.38 billion on spectrum in Germany, and EUR1.01 billion on frequencies in Mexico. In the first nine months of 2010, some 67 percent of Telefonica’s revenue were generated outside of Spain, with Latin America accounting for 42 percent of the total and Europe 25 percent.