Telefónica reports mixed results in its major European markets as Spain struggles while Germany and UK reported growth driven by mobile data.
In Spain, Telefónica did not escape the impact of the country's economic recession, reporting OIBDA of $1.925 billion, down 10.6 per cent from €2.153 billion in the first quarter 2010. This puts further pressure on the company's share price that has underperformed the FTSE Eurofirst 300 telecoms index by 8 per cent over the past year, according to the Financial Times.
Better news came from Telefónica Europe, which includes all its properties outside of Spain. It is reporting 30 per cent year-on-year growth in non-SMS data revenues for the first quarter 2011 and pointed to the fact that four out of five new contract customers in the UK and Germany are now opting for smartphones, as proof that its mobile data strategy is paying off.
At the end of March 2011, Telefónica Europe's total customer base reached 56.9 million--an increase of 5.6 per cent year-on-year and boasted revenues of €3.892 billion in the first quarter, a growth of 8.4 percent year-on-year, driven by accelerating growth in Germany and a solid performance in the UK.
In the UK, the mobile customer base totalled 22.3 million (excluding Tesco Mobile), up 75,000 in the quarter. The Tesco Mobile joint venture continued to grow accumulating 51,000 net additions in the quarter to reach a closing base of 2.6 million customers, a 24 per cent growth year-on-year. Revenues grew 5.3 per cent year-on-year to €1.788 billion in the first quarter, while OIBDA grew 13.7 per cent, which the company credited to its new rational approach to acquisition and retention which puts the emphasis on high value customers rather than simply increasing customer numbers.
Telefónica Germany's mobile revenues grew by 12.3 per cent, after adjusting for mobile termination rates (MTRs) and the total mobile customer base increased 9.4% year-on-year to reach 17.4 million.
Overall, Telefónica Group's first-quarter revenues rose by 10.8 per cent to €15.44 billion, driven primarily by growth in Latin America.
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