The total number of accesses served by Telefónica reached 309 million as of the end of March, up 7% over the year earlier thanks to growth in Latin America.
Revenues totalled 15,511 million euros in the first quarter of 2012, a 0.5% year-on-year increase (-1.8% in the previous quarter), driven by higher sales at Telefónica Latinoamérica (+8.3% year-on-year), which more than offset lower revenues at the European businesses (-6.6% year-on-year). Excluding the negative impact of mobile termination rates cuts, revenues rose by 1.6% from the first quarter of 2011.
OIBDA totalled 5,081 million euros, down 8.8% compared to last year, while operating income was 2,511 million euros. Meanwhile, consolidated net profit for the quarter stood at 748 million euros and was impacted primarily by Telco’s writedown.
“Our earnings for the first three months of 2012 reflect the strategic priorities set for the full year and the success of the company’s shift in commercial strategy, which began in the second half of 2011,” said Telefónica Chairman César Alierta. “These results are in line with internal estimates and thus allow us to reiterate our financial and operational guidance announced for 2012.”
Some highlights from the quarterly report:
- The company is seeking to implement a new approach to handsets subsidies, reducing its upfront costs
- The company is moving from voice to data-centric tariffs
- Smartphones represent 81% of new commercial activity in Europe in Q1
- There were 2x mobile net adds in Latin America vs. Q1 11.
- The company describes Latin America as its “engine for growth”.
- There was a similar revenue contribution from Brazil (23%) and Spain (25%).
- CapEx(ex-spectrum)/sales was 11% in Q1, up 1% over the same period last year. CapEx totalled 1,712 million euros in the quarter, up 10.3% year-on-year. The Company continued to devote the bulk of its investments to growth and transformation projects (81% of total CapEx),fostering the expansion of broadband services, both fixed and mobile.
- The company blamed commercial and regulatory costs for its drop in OIBDA.
- Telefónica’s mobile accesses growth in Latin America accelerated to 13% year-on-year in the first quarter boosting the accesses base to 170.8 million users.
- Telefónica’s fixed accesses in Latin America rose by 2% year-on-year to 34.6 million accesses. The Company’s retail broadband accesses climbed by 12% year-on-year to reach 8.0 million and net additions of pay TV customers totalled 2.3 million, up 23% year-on-year. 75% of fixed accesses now include some bundled offer package (+7 percentage points year-onyear), while 89% of broadband accesses are subscribed to a double or triple-play offer.