Telefonica sees Latin America and Europe offset domestic difficulties

13 May 2010

Spanish giant Telefonica has posted first-quarter revenue of EUR13.9 billion (USD17.6 billion), up 1.7% year-on-year and helped by the acquisition of German broadband provider Hansenet during the fourth quarter of 2009. Net income grew 2% to EUR2 billion as the company’s European (sales up 7.4%) and Latin American (up 4.2%) operations helped compensate for a drop in revenue from the recession-stricken Spanish market, where revenue fell by almost 6%. Brazilian mobile operator Vivo reported strong results which contrasted with the sharp profit margin fall at Telesp, its Brazilian fixed line business. Telefonica says it is ‘prioritising the capture of growth opportunities in its markets’, something which helps explain the motivation for the company’s recent unsolicited EUR5.7 billion bid to buy out Portugal Telecom’s stake in Vivo, which was rejected. At 31 March the company boasted some 273 million fixed and wireless access lines, up 4.6% from a year earlier. The telco forecasts that revenue for the year ending 31 December 2010 will grow by between 1% and 4%.

Spain, Telefonica