Original article: Mobile data brightens mixed Q4 for Europe's telcos
There were mixed fortunes for three European multinational cellcos in the fourth quarter, with Deutsche Telekom dragged down by the US and central Europe and Telefonica hit by rising costs. However, France Telecom claimed to have "met all its objectives" in 2010, and appointed CEO Stephane Richard to be chairman as well.
Deutsche Telekom reported increased losses in Q4 because of write downs and one-off charges at its subsidiaries in Greece, Romania and Hungary; plus customer losses at its T-Mobile USA arm. Its net loss was €582 million, compared to just €3 million a year ago.
Sales fell 4.5% to €15.48 billion, however, the German incumbent forecast a stable 2011.
Chief Rene Obermann said the results are in-line with expectations as the firm begins to execute “our new strategy.” One of its tactics is to sell off, and lease back, its 7,000 US cell towers to free up growth capital, to the tune of several billion dollars.
The changes come as T-Mobile USA continues to disappoint with flat full year revenue and a particularly weak Q4, when the valuable contract subscriber base fell by 318,000 subscribers. The total base fell by 23,000 - the first time the cellco has suffered customer losses – and contrast to gains of 137,000 in the third quarter and 371,000 in 2009's Q4.
Subscriber churn depressed overall T-Mobile Q4 earnings to $268 million (€193 million), down from $306m a year earlier, while sales fell by 1% to $5.36bn. For 2010 as a whole, T-Mobile saw its earnings dip to $1.3bn from $1.4bn and sales fall to $21.3bn from $21.5bn.
While TMo was weak in Greece and Romania, it saw strong performance in Poland and The Netherlands, and its UK joint venture with Orange, Everything Everywhere, had a lackluster year, but was pointing to a stronger position now its merger economies are kicking in.
Spain's major carrier Telefonica had a weak Q4, which dragged down an otherwise solid fiscal year. The firm's continuing efforts to grow and diversify its business across Latin America is offsetting stagnation in Spain, but its operating costs rose in Q4.
For the full year, the company reported net income of €10.17 billion, up 30.8%, on revenue of €60.74 billion, up 7.1%.
Revenue growth was 13.3% in Latin America and 12.7% in Europe, and as at T-Mobile, mobile data was the strongest element, with growth of 19.3%, to hit €9.3 billion. For the fourth quarter, net income fell to €1.33 billion from €2.44 billion, on revenue which increased 9.9% to €16.46 billion. Telefonica expects overall revenue growth of 2% in 2011.
Its mobile subscriber base increased by 8.9% in 2010, to reach 220.2 million people, more than half of this coming from contract users, who now make up 31% of the base, compared to 28% in 2009. It has 22.2 million mobile broadband customers, up 64%. The shift towards higher value postpaid customers is especially notable in Latin America, where there is a strong tradition of prepaid usage, but where the percentage of post-pay customers hit 20%.
Finally, France Telecom/Orange said it had "achieved its 2010 objectives", describing its mobile business as "particularly dynamic, both in Europe and emerging markets". The company reported net income for the year of €4.88 billion, up 43.4% a year earlier, on revenue of €45.5 billion, up 1.5%.
The company said that it saw a 6.9% increase in mobile services revenue from France during the second half of the year, led by data services and handset sales.
But the highest growth came in emerging economies, as Orange pursues an aggressive expansion program in the Middle East and Africa. Total mobile users were 150.4 million at the end of the year, excluding MVNOs, which represented 9.1% growth and 12.5 million net adds.
In Africa and the Middle East, total customers reached 59 million, up 23.1% year-on-year, with 11.1 million net adds. On a group level, it added 3.2 million contract customers, bringing the total to 51.2 million, with year-on-year growth of 6.6%.