Thursday, February 24, 2011

Telefónica's Grows 7% in 2010, Reaches 288 Million

Telefónica's global revenues grew 7.1% in 2010 to 60,737 million euros (+9.9% in 4Q), driven by Latin America (+13.3%) and Europe (+12.7%) and the growing contribution of its mobile data business (close to 9,300 million euros, +19.3% year-on-year organic growth). The number of access lines (mobile and fixed) also grew by 7.2% and the company now has 287.6 million accesses worldwide. In 2010, the Company registered organic net adds of 19.2 million accesses. In Spain, despite the fierce competitive environment, net adds in the last year were six times the gains registered in 2009 in comparable terms.

The company credits its regional diversification: Telefónica Latinoamérica and Telefónica Europe (not including its home market of Spain) represent 68% of the Group's consolidated revenue and generate over 60% of consolidated OIBDA.

Some additional highlights:

Telefónica now has 22.2 million mobile broadband clients (+63.9%), and 17.1 million retail fixed broadband internet accesses (+27%). In addition, as a result of the Group's bundling strategy, 89% of the retail fixed broadband accesses in Spain, and 86% of broadband accesses in Latin America form part of a duo or trio package.

Mobile accesses at the Telefónica Group stood at 220.2 million at the end of 2010, a year-on-year growth of 8.9% (both in organic and reported terms). Organic net additions reached 18.2 million in 2010 (1.3 times those recorded in 2009). The focus on high-value customers has been reflected in a significant increase in contract net additions compared to 2009: 53% of organic net additions corresponded to this segment, compared to 38% in 2009. This has left a total of 69.0 million contract customers (+15.9% year-on-year in organic terms), which represents over 31% of the Group's total mobile accesses (+3 percentage points year-on-year organic).

The strong adoption of mobile broadband services, together with the launch of new and more segmented price schemes has allowed the Group to increase its number of mobile broadband accesses to more than 22.2 million by the end of 2010 (+63.9% year-on-year). This represents a penetration over the total mobile access base of 10.1%, 3.4 percentage points higher than at December 2009.

Retail fixed broadband accesses reached a total of 17.1 million (+27.0% year-on-year in reported terms, +10.9% organic). Net additions picked up in the fourth quarter to reach 422 thousand accesses. In 2010, net additions stood at 3.6 million accesses (1.5 million in organic terms). Brazil was once again the driver of the Group's growth in this type of access, with Telesp registering 681 thousand net additions, a record-high figure in the Company's history.

Bundled voice, broadband, and television services remain key to Group strategy and especially to churn control. In Spain, 89% of retail fixed broadband accesses are bundled as part of either a dual or triple play offer, while in Latin America the figure stands at 86%.

The number of pay-TV accesses stood at 2.8 million in 2010, an 8.9% increase in organic terms on December 2009 (+12.0% reported). Fixed telephony accesses totaled 41.4 million, down 2.7% year-on-year in organic terms, although the rate of decrease was slower in the fourth quarter than in previous periods. In reported terms, the number of accesses rose 1.8%.

The average number of employees in 2010 was 269,047 (13,896 employees more than at December 2009), mainly due to the larger workforce at Atento. Excluding Atento, Telefónica Group's average workforce rose 2% year-on-year to 128,012.

At the close of 2010, OIBDA stood at 25,777 million euros, with year-on-year growth of 14% and an OIBDA margin of 42.4%. Operating cash flow stood at 14,933 million euros for the year.

Telefónica invested over 10,800 million euros in 2010, including the spectrum and license acquisitions carried out in Germany and Mexico. In Spain, despite the difficult economic climate, the company increased its investment by 8.4% to 2,021 million euros, consolidating its solid leadership position in the market and its commitment to the country.

See also