Telefonica Germany said its revenues grew by 3.8 percent year-on-year in Q1 to EUR 1.84 billion, in line with expectations. The company confirmed its guidance for the fiscal year 2020, for flat to slightly higher revenues, broadly stable to slightly higher adjusted OIBDA and capex at 17-18 percent of revenues, while continuing to monitor the impact of the Covid-19 crisis.
In Q1, mobile service revenue rose by 2.4 percent year-on-year to EUR 1.31 billion, as the newer O2 Free plans supported improving ARPU. Handset revenue grew by 7.7 percent to EUR 339 million, supported by strong demand for high-value handsets, which suffered from the closure of shops in mid-March as a result of the Covid-19 pandemic. Fixed-line revenues rose by 6.0 percent year-on-year to EUR 193 million, supported by retail customer base growth on the back of strong VDSL demand.
Underlying OIBDA rose by 1.6 percent to EUR 532 million, thanks to the flow-through from mobile service and fixed revenues, partly offset by higher costs. Underlying OIBDA margin stood at 28.8 percent in Q1, mainly due to the strong growth of lower-margin handset revenues. Capex reached EUR 224 million or 12.1 percent of sales, with annual phasing more back-end loaded. Free cash flow was EUR 241 million.
The number of mobile customers increased by 1.7 percent year-on-year in Q1 to 43.6 million, driven by a 6.3 percent increase in the postpaid (excl M2M) base, which climbed to 22.7 million. The number of mobile postpaid customers rose by 188,000 in the three months compared to an increase of 283,000 one year ago, mainly due to customer demand for the O2 Free portfolio and the launch of speed-tiered O2 Free unlimited tariffs. Mobile postpaid accounted for 52.1 percent of the company's total mobile customer base. M2M accesses reached 1.2 million, a 1.7 percent increase year-on-year in Q1, while the mobile prepaid base lost 407,000 customers due to the ongoing prepaid to contract migration and usual seasonality.
The number of LTE customers jumped 31.1 percent to 25.2 million, thanks to sustained demand for high-speed mobile data services. LTE penetration across the base reached 59.5 percent, up by 13.3 percentage points year-on-year. LTE penetration in postpaid continues to be significantly higher (~75%).
The number of fixed broadband customers reached 2.2 million in Q1, a 5.1 percent growth year-on-year. The number of VDSL customers rose by 12 percent to 1.7 million. Fixed broadband saw 25,000 net additions in the period January-March, driven by continued strong demand for VDSL.
