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What you need to know: This weblog captures key data points about the global telecoms industry. I use it as an electronic notebook to support my work for Pringle Media.

Friday, February 26, 2016

Telefónica Sees Opportunities Aplenty

Telefónica forecast that group revenue will rise by more than 4% in 2016 and that capex will account for 17% of sales - a similar figure to 2015. For the fourth quarter of 2015, Telefónica reported organic year-on-year growth of 3.3% to 11.9 billion euros, lower than the organic growth rate for the year of 4%.

In Latin America, a key growth engine for the group, organic revenue growth slowed slightly to 3.4% in Brazil in the fourth quarter and 8.1% elsewhere in the region. Telefónica said that revenue from digital services (such as video, cloud and M2M) rose 15% year-on-year to 1.07 billion euros, compared with 24% for the year as a whole.

César Alierta, executive chairman, said: "The Digitalisation of the economy is now a reality which is already bringing about significant changes in society; changes that will accelerate in the next years. The growth of connections, data traffic and innovation is going to be exponential and is going to translate into real improvements in terms of productivity, employment and economic growth and, ultimately, into important social progress. The telecom sector is at the centre of that revolution, however new skills are required to capture its full potential.

We must adapt the commercial offering in order to satisfy the growing needs of our customers, characterised by increasingly higher data consumption (data traffic increased by 40% in 2015 and mobile data traffic by 48%, boosted by video usage). In this respect, in 2015, our fibre customers increased by 30%, LTE customers tripled, smartphones advanced by 29% and pay TV by 12%. This translated into higher value customers, both in terms of higher average revenue per access and increasing loyalty, and, therefore, into revenue growth acceleration to 4.0% organic in 2015.

In 2016 growth and data monetisation will accelerate, while we maximise the efficiencies from integration and simplification, and we boost our innovation and big data capabilities. We expect that all of this will be reflected in improvements in the key financial figures: revenue growth higher than 4%, margins stabilising while we maintain strong levels of investment, recover full-cash dividend payment (75 cents per share) and strengthen financial flexibility." source: Telefónica statement

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