Telefonica posts first quarterly loss in nine years

Telefonica, Europe’s largest operator, has reported its first quarterly loss in nine years, in its earnings announcement for 3Q11.

The firm’s revenue took a staggering plunge from €5.1bn ($7bn) in 3Q10 to a €429m loss in the same quarter this year. It blamed regulatory impact, hugely challenging economic and competitive environments and the cost to cut jobs, for the drop.

The operator is slashing its workforce in Spain, halting major mergers and acquisitions and cutting the operator’s debt to revive investors’ confidence.

On the upside it was keen to point out that its German operation saw postpay adds up 182 per cent and data revenues up 53 per cent for the third quarter. Excluding the Spanish market, Telefónica’s mobile data revenues now account for 41 per cent of all mobile service revenues.

José María Álvarez-Pallete, chairman and chief executive of Telefónica Europe, said: “Telefónica Europe continued to see the benefits of its successful tiered pricing mobile data strategy. Mobile data revenues – driven by increasing smartphone penetration and spiralling mobile data usage – represented 41 per of total mobile service revenues in the first nine months [of 2011], compared to 36 per cent in the same period of 2010.”

“Strong commercial results by Telefónica Germany offset moderate performances elsewhere in the Group, where the operating businesses have seen growth restricted by increasingly challenging macro-economic climates.”

He added that the third quarter revenues took the firm to €11,529m for the first nine months of 2011 and organic revenue growth, excluding the impact of mobile termination rate cuts, stood at 2.5 per cent.

“Telefónica Europe’s total customer base reached 57.8 million at the end of September 2011 – a 5 per cent rise year-on-year, while the mobile base was 48 million, with growth mainly in the contract segment.”