Telefónica Deutschland reported what Jefferies International analysts described as a "solid set" of preliminary results that were slightly ahead of expectations for the first quarter of 2015.
The German operator said revenue in the first three months of the year increased 2.9 per cent year on year to €1.9 billion ($2.1 billion), while underlying operating income before depreciation and amortisation (OIBDA) grew 5.7 per cent to €378 million. The year-on-year comparisons are based on the combined figures for Telefónica Germany and E-Plus for the first quarter of 2014. The company has also reiterated its outlook and synergy target for 2015.
"We came out of the blocks well at the start of the year. Based on new products and further network enhancements we continued to make good progress on our way to become the leading digital telco," said CEO Thorsten Dirks.
The company attributed its growth to increasing mobile data usage among customers, adding that mobile service revenues increased 1.5 per cent to €1.3 billion year-on-year. However, the company generated higher revenue growth of 28.8 per cent from the sale of devices.
The company generally provided a "confident management tone on synergy delivery" following the merger of Telefónica's O2 Germany with E-Plus last year, Jefferies analysts noted.
Telefónica Deutschland confirmed that it has made further progress with the execution of its integration programme during the first three months of 2015. Some 301 shops will be taken over by Drillisch in the second half of 2015, while the company is also continuing to implement a staff reduction programme to eliminate 1,600 full-time positions by 2018.
Other milestones reached include the introduction of a 3G national roaming agreement for the two separate networks from mid-April. O2 Germany has also continued to invest in its LTE network, and expects to have LTE coverage of more than 75 per cent of the population in Germany by the end of 2015.
At the end of March 2015, Telefónica Deutschland's customer base reached 47.7 million, an increase of 1.6 per cent year-on-year on the back of continued growth of the mobile base, which stood at 42.2 million (+2.5 per cent year-on-year). The LTE customer base stood at 5.1 million at the end of March 2015.
- see the Telefónica Deutschland results statement
Report: Telefónica Deutschland to drop E-Plus, BASE and Simyo brands
Telefónica Deutschland completes yourfone sale to Drillisch, rules out more E-Plus asset sales
M&A helps reshape the European mobile landscape
Vanishing brands reflect Europe's shifting mobile landscape
Telefónica Deutschland aims to offer same network quality as rivals by 2017