Telefonica reduced churn and cost following digital investment

Telefonica Brazil digital investment
Global telecom operator Telefonica has started making investment in digital channels to reduce mobile subscriber churn and cut costs.

Telefonica posted revenue of €12.754 billion (–2.5 percent), service revenue of €11.746 billion (–3.3 percent), OIBDA of €4.095 billion (–1.9 percent) with OIBDA margin of 32.1 percent and net income of €839 million (–14.7 percent) in Q3 2017.

Though Telefonica continued investments in ensuring the best network to its customers, it could reduce Capex intensity. Telefonica reduced Capex to sale to 14.1 percent in nine months of 2017 against the guidance of 16 percent for the full year of 2017.
Telefonica digital servicesTelefonica Brazil is undertaking several initiatives for promoting the use of digital channels. It has boosted e-billing and introduced new payment methods. Problems diagnosis, traceability, etc. are also done via digital program.

Telefonica Brazil’s digital programs are focused on providing automated, real-time processes and 360˚ customer view. Its online charging enables real-time spend control and data sharing. Payment systems are providing new payment methods. Systems are providing service monitoring, remote diagnosis and resolution, self-healing, etc. Telefonica Brazil introduced new app for a differential self-management experience.
Telefonica digital vision
Telefonica Brazil has achieved 2.3 times increase in the percentage of unique users in the digital channels and 36 percent increase in digital interactions – resulting into 24 percent reduction in monthly calls to call center.

This apart, Telefonica Brazil has also achieved 2.5 times improvement in sales in self-assisted channels and 5 percent increase in remotely resolved incidents.
Telefonica Network transformation to All-IP
Telefonica Spain, following investment in digital initiatives, is expected to reduce commercial costs by 67% in 2017. Lower failures, energy efficiency, increase FTTH take and revenue increase are the other benefits.

Telefonica Spain reduced lower unitary maintenance cost of customer equipment by 40 percent during FTTH vs. Copper. The expected decrease in Opex and Capex Systems will be 37 percent in 2017 with 9 percent increase in productivity.

“Transformation remained key and the focus on digitalisation amongst the company’s different operating areas has contributed to increase our differentiation and become more efficient, and will enable us to pave a new way to interact with our customers through cognitive intelligence while improving resource allocation,” said Jose Maria Alvarez-Pallete, chairman and CEO of Telefonica.
Telefonica profitability improves
Telefonica said the quality of the group’s customer base continues to improve in the third quarter of the year, as reflected by the acceleration of the average revenue per customer (ARPU + 4.3 percent organic year-on-year) and churn stability (+0.1 pp).

Total subscriber base stood at 344.5 million at September 30, with generalized year-on-year growth, in line with the previous quarter.

Telefonica shows growth rates in LTE customers (1.6 times), mobile contract accesses (+ 5 percent) and smartphones (+ 8 percent). FTTx and cable customers (+ 21 percent up to 10.5M), which is 49 percent of the total for fixed broadband accesses, with coverage of 42.8m premises passed (+15 percent y-o-y), and Pay TV accesses (101k).

Telefonica accelerated the digital transformation to contribute improving its efficiency and growth to the maximum. Telefonica said 42.8 million premises passed with FTTx and cable (+15 percent); 18 million in Brazil (FTTx and cable), 18.6 million in Spain (FTTH) and 6.2 million in Hispanoamerica (FTTx and cable). 4G coverage increased to 69 percent (+11 p.p.).