Telecomunicacoes de Sao Paulo (Telefonica Brazil, incl Telesp) today released its consolidated results for the first quarter of 2011, presented in accordance with the International Accounting Standards (IFRS). The group booked first-quarter net operating revenues of BRL3.966 billion (USD2.449 billion), up 1.9% compared with 1Q10, driven in part by a rise in broadband revenues and corporate data. EBITDA in the first three months of the year reached BRL1.189 billion, down 6.8% when compared to BRL1.276 billion in the corresponding period of 2010. EBITDA margin reached 30% in 1Q11, a reduction of 2.8 percentage points year-on-year. The company attributed the narrowing EBITDA margin to changes in the mix of provided services, with a revenue reduction of traditional telephony services, which have higher margins, and increased data revenues, in both the residential and corporate segment. Net income was BRL418.3 million in 1Q11, down 13.7% y-o-y. CAPEX for January-March was BRL373.2 million, up 4.4% on a year ago, with the main focus being investments in broadband and new businesses.
Telefonica Brazil ended the first quarter of 2011 with a total of 15.062 million fixed accesses, up 4.1% in twelve months and stable compared to 4Q10. Broadband accesses – offered under the brands ‘Speedy’, ‘Ajato’ and ‘Fiber’ – reached 3.4 million at the end of the March 2011, up 20.7% or 578,000 compared to 1Q10. Fixed lines in service topped 11.2 million at the same date, unchanged year-on-year but down 1.1% compared to the fourth quarter of 2010.