Telefonica Capex decreases 19.6% to €2.72 bn

Telefonica said its Capex decreased 19.6 percent to €2.721 billion in the first half of 2020 as result of the Covid-19 related restrictions in deployment of network.
Telefonica Capex 2020
Deployment of LTE and fibre networks, increase in network capacity and virtualisation, and improvement in quality and customer experience by the implementation of AI in the tech platforms were some of the focus areas, Telefonica said.

First half Capex

Telefonica Spain’s Capex decreased 20.8 percent to €649 million versus H1 2019, as Covid-19 restrictions resulted in lower retail and wholesale additions.

Telefonica Germany’s Capex fell 4.2 percent to €475 million. Despite some Covid related temporary supply chain disruptions, 4G/LTE-rollout made steady progress while preparing for a ramp-up of 5G, Telefonica said.

Telefonica UK’s Capex declined 0.8 percent in H1 2020 and 16.2 percent in Q2 2020 to €406 million.

Telefonica Brasil’s Capex dipped 12.3 percent to €665 million, and was allocated mainly to FTTH deployment. Telefonica Brasil’s FTTH coverage reached 53 new cities in the year. Its 4G network reached 3,334 cities, covering 89 percent of the population.

Telefonica Hispam’s Capex decreased 28.8 percent to €458 million.

Telefonica’s UBB network reached 131.2 million premises passed with accesses connected increasing by 5 percent, accounting for 72 percent of total fixed broadband accesses.

Telefonica plans to continue investing in fibre, aiming to offer up to 10Gbps speed to more than 20 million premises in Spain with 10-GPON technology and to optimise deployment of 5G.

Telefonica has made progress on network simplification with the closure of ~500 central offices in Spain and continued customer migration away from the copper network, which is expected to have no residential clients by 2025.

In addition to efficiencies generated in energy, space and maintenance this allows Telefonica to free up space for Edge Computing equipment in the coming years (fibre takes up around 15 percent of copper space).

Telefonica revenue

Telefonica Group revenues fell 14.8 percent to €10.34 billion, mainly as a result of negative effects of the Covid-19 pandemic.

Telefonica achieved 4.9 percent drop in operating expenses. OIBDA margin stood at 32.1 percent, down 4.5 p.p.

Telefonica Group’s access base dropped 2 percent to 337.3 million at June 2020. Average revenue per access in Q2 2020 was affected by the Covid-19 crisis.