Telefonica Deutschland reported revenue of EUR 5.522 billion for 2014. The figure includes E-Plus, acquired from KPN, from 01 October 2014. On a pro forma combined basis for the full year, 2014 revenues would have been EUR 7.793 billion. In the fourth quarter, total revenue amounted to EUR 2.019 billion, a largely stable performance over the previous year on a like-for-like basis (-0.2%). Fixed revenue reached EUR 274 million (-7.7% year-on-year), an improvement from -9.0% in the third quarter.
The group reported underlying OIBDA of EUR 354 million in Q4, giving a margin of 17.6 percent. This excludes a restructuring charge for the integration of E-Plus of EUR 401 million. Over the full year, reported OIBDA reached EUR 679 million, and the one-time charges led to a net loss of EUR 721 million.
Net additions in the mobile postpaid segment reached 318,000, helped by the focus on data monetisation and leveraging strong demand for LTE, Telefonica said. Prepaid net additions totalled 35,000 on the back of strong performance from partners. Smartphone penetration at the end of 2014 surpassed 75 percent for Telefonica’s premium brands in the consumer postpaid segment.
Mobile service revenue for 2014 totaled EUR 3.580 billion. In the fourth quarter, mobile service revenue amounted to EUR 1.391 billion, flat year-on-year on a like-for-like basis, and in line with the company's quarter-on-quarter outlook. The increased adoption of mobile data bundles has started outweighing ongoing declines from traditional voice and messaging services, the operator said.
Mobile data revenue totalled EUR 1.793 billion in 2014, after consolidating E-Plus from the fourth quarter. The share of mobile data revenues in total mobile service revenues in the fourth quarter of 2014 was 52.0 percent or EUR 723 million, and the share of non-SMS data revenues in total data revenues was 68.9% in the same period, totalling EUR 499 million. Handset revenues amounted to EUR 795 million in 2014 and EUR 350 million in the fourth quarter, following the strong demand for smartphones and LTE-enabled devices in particular.
Operating cash flow (OIBDA minus capex) was still a negative EUR 169 million in 2014, due to the one-off restructuring charges. Telefonica also increased capex in Q4 as part of its network integration and upgrade plan. Compared to the combined capex of Telefonica and E-Plus in Q3 2014, the fourth-quarter figure was up 53 percent to EUR 438 million. Over the full year, the combined operators spent EUR 1.6 billion.
Telefonica said it plans to progress quickly with the integration of E-Plus, and the two operators have already integrated their product offers. In 2015, the first full year of their merger, the operator targets annualised synergies in operating cash flow of EUR 250 million, or around 30 percent of the total expected from the acquisition. OIBDA is expected to grow by more than 10 percent this year from the pro forma figure of EUR 1.461 billion in 2014. After the spike in capex in Q4, investment spending this year is expected to show a high single-digit decline from the combined EUR 1.161 billion in capex last year. Telefonica also reiterated its intention to pay a cash dividend of at least EUR 700 million for 2014.
