Telefonica Deutschland has updated its full-year outlook and now expects "slightly positive" growth in revenues and adjusted OIBDA after a positive Q2. Results were previously forecast flat to slightly higher in 2021. In the three months to June, revenue growth accelerated to 5.3 percent to EUR 1.89 billion, and adjusted OIBDA rose 10.8 percent to EUR 612 million.
Mobile service revenues rose 7.4 percent year-on-year to EUR 1.37 billion in Q2, driven by strong customer growth and ARPU improvement under the O2 brand, the company said. After the pick-up in handset sales in Q1, equipment revenues were down 1.2 percent in Q2 to EUR 318 million.
Postpaid customer growth was more than double the year-earlier period, with 374,000 net additions, supported by the O2 Free range and gradual re-opening of shops as Covid-19 restrictions were lifted. Postpaid churn dropped to a record low of 1.0 percent in Q2, and was an even lower 0.8 percent for the O2 brand.
M2M services also added 82,000 lines, and prepaid numbers grew by 91,000. In total, Telefonica ended the period with 45.0 million mobile lines, up 3.4 percent from a year earlier. Postpaid increased to 53.8 percent of the total, up 1.2 percent points year-on-year, and 81 percent of postpaid customers were on the LTE network. Blended mobile ARPU reached EUR 9.9 in the first half of the year, up 1.5 percent from a year ago thanks mainly to fewer inactive prepaid cards.
Fixed revenues increased 3.5 percent to EUR 200 million, led by the growth in VDSL subscribers. Total fixed broadband subscribers were up 0.4 percent year-on-year to 2.3 million, including 1.8 million on VDSL, up 5.1 percent. On a quarterly basis, the operator lost 1,000 broadband connections in Q2, but Telefonica said it returned to positive growth in June when O2 shops reopened. VDSL added a net 10,000 new customers in Q2.
Capex reached EUR 280 million in Q2, up 11.5 percent from a year ago. That's equal to 14.8 percent of revenues, below the annual target of 17-18 percent, with spending to be weighted to the end of the year, Telefonica said. Free cash flow amounted to EUR 382 million in the first half of the year, or EUR 14 million after lease payments, better than the negative EUR 20 million in H1 2020.
