Telefonica raised its full-year outlook for organic revenue growth to around 2 percent from 1 percent, after results strengthened in the third quarter. While total revenues at the Spanish operator were down 8.3 percent year-on-year to EUR 11.699 billion, organic growth was 2.7 percent, up from 2.0 percent in the previous quarter. Growth was led by South America and the UK, while the biggest markets Spain and Brazil were also in positive territory.
OIBDA fell 1.4 percent to EUR 4.038 billion, leading to a 2.4 point improvement in the margin to 34.5 percent. On an organic basis, OIBDA was up 4.1 percent and the margin rose by 0.4 percent points, in line with the company's forecast for 0.5 point increase over the full year.
Net profit increased 35.8 percent to EUR 1.139 billion, helped again by a positive court ruling in Brazil worth EUR 258 million and small gains from tower sales. That was offset by provisions of EUR 83 million in Brazil and the costs of hyperinflation in Argentina, at EUR 103 million.
In the first nine months of the year, free cash flow fell 8.3 percent year-on-year to EUR 2.957 billion, but was up 0.9 percent excluding spectrum. Capex was down 4.7 percent over the same period to EUR 5.680 billion, including EUR 612 million for spectrum rights. Net debt declined for a sixth consecutive quarter and fell 9.7 percent year-on-year to EUR 42.636 billion.
High-value customers
Executive chairman Jose Maria Alvarez-Pallete said the results reflect the company's focus on high-value customers, helping to grow ARPU. The postpaid share of mobile customers increased to 44.9 percent from 41.8 percent a year ago, with postpaid net additions of 1.9 million in Q3 alone. Pay-TV subscribers also grew 5.6 percent year-on-year to 8.85 million, including 1 million for the Movistar Play OTT service in Latin America.
LTE coverage stood at 75 percent at the end of September, up from 69 percent a year ago. That includes 92 percent coverage in Europe and 69 percent in Latin America. The increased coverage helped LTE reach 64 percent of all network traffic.
The FTTx/cable coverage reached 81.0 million premises at the end of September, including 49.0 million on its own network, up 15 percent from a year ago. In addition to 20.8 million homes passed in Spain and 19.3 million in Brazil, the footprint grew 45 percent year-on-year to 9.0 million in the rest of Latin America. Customers connected were up by 21 percent year-on-year to 12.8 million.
The operator said its launch in October of the new Movistar Home platform in Spain also saw success. The pre-order campaign (5,000 units at EUR 49) quickly exceeded the units available, which will be delivered from 15 November. A Christmas campaign is planned, offering the device at EUR 79.
