Latin America and mobile data drive Telefonica revenue

Telefonica’s first-half revenues grew by 6.3 percent, powered by the Latin American business and an increase in mobile data revenue.

Consolidated revenues rose to 30,886 million euros in the first half of 2011 thanks to the sharp rise at Telefonica Latinoamerica (+18.4 percent year-on-year) and the significant increase of mobile data revenue (+18.5 percent year-on-year), showing a strong dynamism and remaining a key growth driver in all regions.

Telefonica Latinoamerica and Telefonica Europa accounted for 71 percent of consolidated revenue and 64 percent of Group OIBDA.

The contract segment continued to increase its weight within the overall customer base (+13 percent) and accounted for 32 percent of the group’s 227.3 million mobile accesses.

Moreover, the segmentation of tariffs by consumption patterns (tiered pricing) and the quality of the network boosted mobile broadband accesses, which totalled 29.8 million at the end of June. Retail fixed broadband and Pay TV accesses also posted respective growth of +8 percent and +16 percent to 17.6 million and 3.1 million.

The Telefonica Group invested 3,838 million euros through June, with the development of fixed and mobile broadband services accounting for the bulk of this sum. Spain experienced especially sharp growth in investment (+8.7 percent) in the first half.

During the first six months of 2011 the company focused its commercial strategy on value rather than volume, increasing efforts to improve customer satisfaction and loyalty, while fostering at the same time a strong adoption of smartphones” and other mobile broadband devices in our customer base, increasing tariff segmentation and widening the range of devices available.

This strategy has led to continued growth in accesses (+6 percent year-on-year in both organic and reported terms) to 295.0 million at the end of June 2011. By region, Telefonica Latinoamerica and Telefonica Europe, with year-on-year organic growth of 8 percent and 5 percent respectively, were the main contributors to the growth in Telefonica’s customer base.

Mobile broadband accesses -accesses with a data rate attached and therefore active users of the service- reached 29.8 million at the end of June 2011. This figure represents a penetration rate of 13 percent of Telefonica’s mobile access base. Telefonica Europa reached a penetration rate of 28 percent, followed by Telefonica Espana (23 percent), while there is huge scope to increase penetration at Telefonica Latinoamerica (7 percent in June 2011).

Retail fixed broadband accesses reached 17.6 million, up 8 percent year-on-year. Bundles of voice, broadband, and television services remain key to this strategy and especially to churn control. Both in Spain and Latin America, close to 90 percent of retail fixed broadband accesses are bundled as part of either a dual or triple service package.

By Team
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