Spanish carrier Telefonica, which owns the O2 mobile brand, reported a solid financial year on Friday.

Group revenues for the full year 2009 climbed 2.8 per cent year on year to €58.143bn, while net income for the full year also climbed 2.4 per cent year on year from €7.59bn in 2008 to €7.77bn in 2009.

Telefonica Spain was singled out as having a good fourth quarter of 2009, stemming the decline in wireline revenues at €3.1bn and keeping the wireless business just about level. While telecoms analyst and sector strategist at Daiwa Securities, Michael Kovacocy, noted that all indicators were strong for Latin America, confirming the unit’s position as Telefonica’s growth driver.
“Mexico has been singled out by Telefonica’s management as a key contributor to Latin American operating cash flow growth in 2009. We have previously identified this country as a potential material driver of growth moving forward, given the dominant position of America Movil and Telmex – which is now eroding with market share moving towards Telefonica. The mobile market is an especially attractive opportunity, with America Movil currently enjoying what is in our view an unsustainable 72 per cent of overall subscriber market share. Upcoming mobile frequency allocations in Mexico City should provide further mid to long-term upside as Telefonica has been unable to properly tap into the sizeable population of Mexico’s largest city due to a lack of suitable spectrum,” Kovacocy said.