Telecom Lead Madrid: Telefónica will spend more than €9.45 billion as Capex in 2013.
Telefonica on Thursday — while announcing the revenue guidance and full year financial result for 2012 — said the Capex to sales ratio will continue to be 14.2 percent and its expects growth in revenue this year.
Last year’s revenue was supported by growth in mobile data and Latin America operations.
Last year Telefonica’s Capex (Capital expenditure) was €9.45 billion and it improved the Capex efficiency by focusing on growth, reallocating resources to higher-growth operations and services — selective rollout of fiber and VDSL.
In 2012 — while maintaining Capex to sales ratio at 14.2 percent — the telecom major also improved service quality and customer satisfaction, strengthening our networks via spectrum acquisition, and prioritising simplicity in order to best take advantage of shared investment.
Its 2012 Capex of €9,458 million euros included 586 million euros mainly relating to the cost of the spectrum in Brazil, Ireland, and Venezuela.
The company devotes bulk of its investments on growth and transformation projects (81 percent of total investment), fostering the expansion of high-speed broadband services, both fixed and mobile. The Capex to sales ratio (excluding spectrum) for 2011 also stood at 14.2 percent.
Meanwhile, Telefonica’s revenues in 2012 decreased 0.8 percent to €62.35 billion.
Its revenue was supported by 12.8 percent increase in mobile data revenues. Growth of mobile data revenues in Latin America — at 5.5 percent — also contributed to significant increase in revenue, said Telefonica on Thursday.
However, its net income plummeted 27.3 percent to €3.9 billion.
Adjustment of the value of stakes in Telecom Italia; Telefónica Ireland, and effect of the devaluation of the Venezuelan Bolivar impacted net income.
The company’s total accesses rose 3 percent year-on-year, reaching 315.7 million at year end 2012, with a significant rise in the number of contract accesses and fixed and mobile broadband accesses.
Telefónica Latinoamérica posted 6 percent year-on-year increase in accesses (67 percent of the total).
Mobile accesses stood at 247.3 million at the end of the quarter, up 4 percent on 2011, driven by sustained growth in mobile contract accesses (+7 percent year-on-year), which now account for 33 percent of total mobile accesses.
The company’s mobile broadband accesses stood at 52.8 million in December 2012, maintaining 38 percent year-on-year growth, and representing 21 percent of mobile accesses (+5 percentage points year-on-year).
Emeka Obiodu, Telco analyst at Ovum, said: “Performance of Latin America finally vindicates the group’s push into the region. It has not always looked wise as Telefonica’s higher debt burden (compared to its peers), amassed partly in trying to build the Latin American footprint, began to threaten the viability of the group.”
Its profits, this time, have been impacted by 2.5 billion euro write-down in Venezuela, confirming the continued existence of political and financial risks from the region. The writedown, and other issues in Ireland and Italy were largely responsible for the massive 82 percent decline in profits in the year.
