Telefonica reported a small rise in underlying revenues and OIBDA in the third quarter, putting the group on track to meet its outlook for stable to slightly higher organic results in the full year. The Spanish operator said its strategy laid out two years ago was bearing fruit, with progress on fibre ventures and tower sales and net debt down by nearly a third in the past year, to EUR 25 billion.
Quarterly revenues were down 11.1 percent to EUR 9.30 billion following the deconsolidation of O2 UK, sale of Telxius towers and divestment in Costa Rica, while one-time gains on the asset sales helped OIBDA grow 39.8 percent to EUR 3.73 billion. On an organic basis, excluding the changes in scope and a minimal forex impact, revenues rose 3.6 percent and OIBDA was up 1.6 percent. This was the second consecutive quarter of underlying sales growth, with service revenue growth improving to 3.3 percent from a rise of 1.9 percent in Q2.
Capital expenditure was kept well within guidance, with a ratio of 13.2 percent of sales in the first nine months compared to a target of around 15 percent. In Q3, capex was up 5.3 percent year-on-year, excluding spectrum payments of EUR 310 million in Spain. The lower capex intensity was helped by new joint ventures to expand the fibre network, including the recently launched Fibrasil and UGG in Germany. As a result, operating cash flow (OIBDA minus capex) was largely stable in Q3, at EUR 2.24 billion.
The total FTTH footprint reached 53.5 million premises passed at the end of September, up by around 2.1 million from June. Take-up improved to 27 percent, up 1.1 percent points from a year ago.
On the mobile market, Telefonica ended the quarter with 274.26 million lines, up by 3.8 percent year-on-year. That includes nearly 115.9 million postpaid connections, an increase of 1 million from June. Fixed broadband connections rose more slowly, with only 51,000 net additions in Q3 for a total 25.71 million, and pay-TV subscribers fell by 106,000 over the same period to 11.15 million.
