Wednesday, May 13, 2009

Telefónica Reaches 261.4 Million Accesses, Maintains Guidance, Cuts CAPEX

Telefónica is now serving over 261.4 million customer access lines worldwide, up 11.9% compared to a year ago. There has been growth in mobile access (+15.4%), broadband (+17.5%) and pay TV (+24.8%).


The company also reiterated its financial guidance for 2009, maintaining a target of distributing EUR 1.15/share in 2009.


Some highlights for the quarter:



  • Telefónica Latin America continues to drive the Group's growth (with organic revenue growth of 8.7%).


  • In Europe -- where organic revenue grew by 4%-, the business has shown resilience, driven by solid results in the United Kingdom (+7%) and Germany (+3.6%). In its domestic market, Telefónica has complied with its strategy to maximize income and maintain solid operating cash flow (+0.2% in comparable terms)


  • In the current economic context, the sound performance of the Telefónica Group in the first quarter of 2009 reflects the
    Q1 revenue stood at EUR 13,703 million in the first quarter of 2009, showing a solid 2.8% year-on-year growth in organic terms.


  • Telefónica Latinoamérica now serves over 159 million accesses across the region at the end of March (up +15.8% on March 2008).


  • By type of access, the Telefónica Group's wireless accesses exceeded 198 million at the end of March, with net adds in the first quarter of around 2.4 million and around 22.5 million customers5 compared to the end of March 2008. The main drivers of the net adds in the first quarter of the year were Brazil (0.7 million), Germany (0.3 million), Mexico (0.2 million) and Argentina (0.2 million).


  • Retail internet broadband accesses stood reached close to 12.8 million, a year-on-year increase of 17.5%, driven by the growing adoption of voice, ADSL and pay-TV bundled offers. It is worth highlighting that in Spain over 86% of retail broadband accesses are bundled as part of some kind of dual or triple offers, whilst in Latin America, 51% of broadband accesses are bundled as part of a dual or triple package. In the first quarter net adds were 0.3 million accesses, most of which coming from Brazil.


  • Pay TV accesses exceeded 2.3 million by the end of March, almost 25% more than a year ago. The company has pay TV operations up and running in Spain, the Czech Republic, Peru, Chile, Colombia, Brazil and Venezuela.


  • In absolute terms, Telefónica Latino America's contribution to total Group revenue continued to grow, rising to 39.4% (+2.3 percentage points compared to the same period in 2008), whilst Telefónica España and Telefónica Europe contributed around 36% and 24% respectively, to reported revenue.


  • The Telefónica Group's operating expenses in the first quarter amounted to 8,572 million euros, down 2.3% on the end of March 2008.


  • Telefónica estimates that around 45%-50% of its total operating expenses can be considered to be variable as they relate mostly to interconnection and commercial expenses (handset subsidies, dealers commissions and advertising), and could therefore be managed in the short term to respond to changes in demand. The company said this gives it the flexibility to adapt its operating costs.


  • After reaching peak levels in the CapEx/Revenue ratio (14.5%) in 2008, the company has trimmed its CapEx for 2009 and now plans to spend EUR 7,500 million euros (vs. 8,401 million euros in 2008).


  • The Spanish wireless market totalled 53.9 million lines at the end of March 2009, a 5.1% y-o-y growth and with an estimated penetration rate of 118%, an increase of almost 6 percentage points compared to March 2008.


  • At the end of March 2009, Telefónica España's wireless business handled over 23.6 million wireless lines, up 2.6% year-on-year, driven mainly by growth in the number of contract customers (+4.3% compared to March 2008), which represents 61.6% of the total (1.0 percentage points higher than at the end of March last year). Net adds in the year's first quarter totalled 9,836 lines.


  • The Brazilian telecommunications sector remained buoyant in the first quarter of 2009, with significant growth in both broadband and wireless telephony, and leaving scope for increased penetration. Telefónica managed 61.4 million accesses in Brazil at the end of March, year-on-year growth of 22.9%.


  • Argentina's telecoms market showed a high dynamism in the first quarter of 2009, posting significant revenue growth, underpinned by improved usage ratios and higher customer numbers. In this context, Telefónica's customer base increased 6.5% year-on-year to 20.9 million, with significant year-on-year growth in wireless accesses (+9.1% to 15.0 million) and broadband (+24.9% to over 1.1 million).
http://www.telefonica.com

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