Telefonica revenues down 5% in Latin America, Mexico returns to OIBDA growth

Latin America

Telefonica said its operations in Latin America posted a 4.8 percent organic decline in total revenues to EUR 2.20 billion in the first quarter of 2020, attributed to lower handset sales (-14.7%) due to early Covid-19 impact and lower service revenues in mobile. The newly-combined Telefonica Hispam unit comprises all of Telefonica’s Latin American subsidiaries, with the exception of Brazil, and is being spun off as part of a wide-ranging restructuring plan announced in November. 

The unit’s total operating income before depreciation and amortisation (OIBDA) was down 10.6 percent to EUR 502 million in the first 3 months of the year, with the OIBDA margin declining 1.6 percentage points to 22.8 percent. OIBDA fell 17.8 percent and 17.5 percent in Peru and Chile due to high competitive intensity but returned to positive growth in Mexico (up 47.7% year on year) thanks to cost savings resulting from the mobile access deal with AT&T.

Telefonica’s total retail accesses throughout Latin America were down 5.9 percent year on year to 108.7 million, with mobile accesses declining 5.0 percent to 91.8 million. The company said postpay accesses decreased fell 1.2 percent, impacted mainly by Argentina, but grew in Mexico and Colombia thanks to enhanced offerings, including the Movistar Play VoD platform, which has reached 1.4 million active users. 

In the fixed business, the company’s focus on fibre deployment continued to progress, supported by co-investment deals in some countries, including Chile, Argentina and Colombia, with American Tower Company and Andean Tower Partners. Telefonica Hispam’s total fixed telephony customers well 14.1 percent year on year to 8.46 million but “ultrabroadband” accesses were up 10.9 percent to 3.30 million, with FTTH accesses soaring 24.2 percent to 2.92 million with a 28 percent uptake.

FTTH network deployment was up 1.7 million since Q1 2019 to 11.7 million premises passed throughout the region at the end of March, with Chile posting a record commercial performance in the quarter. Telefonica said fibre deployment enabled the acceleration of pay-TV through IPTV, improving resource allocation profitability and deprioritising DTH. As a result IPTV accesses were up 152.7 percent to 385,300 while pay-TV accesses fell 7.5 percent to 2.93 million at the end of the quarter.

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