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Telefónica quarterly revenue down 7.7%

Telefónica ended June with 50M LTE subscribers

Telefónica reported 12.7 billion euro ($14.07 billion) in revenue for the second quarter of 2016, down 7.7% compared to the same period last year. The telco’s net profit for Q2 reached 693 million euro, down 54.5% year-over-year.
“The performance of the main financial variables in the second quarter was affected by the depreciation of the currencies against the euro, fundamentally the Brazilian real, Argentine peso and the sterling pound,” the telco said in its earnings statement.
Telefónica’s Spanish business saw the highest growth in terms of revenue during the quarter at 2.5%. The telco’s operations in Germany declined 5.9%, while its revenue in Spanish-speaking Latin America fell by 14.6% in the quarter. Meanwhile, Telefónica’s Brazilian business declined by 9.8% year-on-year.
The telco’s capital expenditures during Q2 totaled 1.95 billion euro, down 45.8% compared to the year-ago period. Capital expenditures in the domestic operation amounted to 463 billion euros, down 2.8% year-over-year.
The European telco ended June with 347.5 million total subscribers, down 2% year-over-year. Mobile telephony subscribers totaled 272.6 million at the end of June, down 2.1% year-on-year. Telefónica counted 50 million LTE subscribers at the end of the period, reaching 19.3% penetration of its overall mobile base.
The telco also said it supported 130 million smartphone users, up 18.1% compared to the year-ago period. Penetration of smartphones in the company’s overall mobile subscriber base reached 51.1% at the end of Q2.
“Our second-quarter results reflect the benefits of Telefónica’s structural transformation, which allowed us to build the future, driving our innovative capabilities and Big Data. The network improvements through excellent connectivity, together with the differentiation and quality of our products and services, have been key to the success of our commercial activity, focused on value, and improved customer loyalty,” Telefónica’s executive chairman, Jose Maria Alvarez-Pallete, said. “All this is reflected in the continued profitable growth for another quarter, which along with the capture of synergies and efficiencies, was the main growth lever for service revenue, [operating income before depreciation and amortization] , operating cash flow and margin expansion.”

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Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.