Telefónica Deutschland reports results for the third quarter and maintains its dividend policy

-Data revenues increase by 20.2 percent
-110,000 new prepaid customers
-Revenue trends stabilizing
-Investments lay the foundation for future success
MUNICH. Due to the continued strong competition and changed customer behaviour the third quarter of 2013 also remains challenging with declining operating results and OIBDA margin on the back of commercial investments. However, Telefónica Deutschland registers particularly strong growth in the data business once again. The number of new customers in the prepaid segment also increases substantially.
René Schuster
"The data business and LTE, attractive mobile and fixed line offerings as well as innovative products and services for various target groups are key factors of our success," says René Schuster, CEO of Telefónica Deutschland. "One year after the IPO we are strongly committed to our strategy and excited about upcoming opportunities in 2014." Telefónica Deutschland records high double-digit growth in the data business. Non-SMS data revenues increased by 20.2 percent in the third quarter of 2013 over the same period last year. Similarly, Non-SMS data revenues grew significantly as a percentage of total data revenues. They amounted to 67.6 percent, corresponding to a growth rate of 9.7 percentage points compared to the third quarter of the previous year. The persistently high demand for data usage is also reflected in the choice of devices. Almost 70 percent of the O2 contract customers already use smartphones which represents an increase of 13 percentage points compared to the third quarter of the previous year. The number of devices that support the state-of-the-art mobile standard LTE has also increased significantly and continues to drive data usage further. Thus, LTE-capable devices have already accounted for 55 percent of all devices sold in the third quarter of 2013, representing an increase of 15 percentage points compared to the second quarter of the same year. Non-SMS data ARPU (average data revenue per user) is also high. It increased by 16.9 percent to €4.20 in the third quarter of 2013 compared to the corresponding period the year before.
Rachel Empey
"The telecommunications market remains highly dynamic. It simultaneously offers numerous opportunities for instance from the strongly growing number of smartphones and the related data usage. To exploit these, we will continue to implement an appropriate investment strategy. At the same time we stay committed to maintain an attractive shareholder remuneration," says Rachel Empey, CFO of Telefónica Deutschland. The number of customer accesses (wireless, fixed network, wholesale) climbed 0.5 percent to 25.4 million compared to the third quarter of the previous year, with contributions coming, among other things, from the postpaid segment. In the third quarter of 2013, the company increased its contract customer base by 4.3 percent year-on-year to 10.3 million. Secondary brands and particularly the prepaid business continued to perform strongly with 110,000 new prepaid customers for Telefónica Deutschland in the third quarter of this year. Excluding mobile termination rate cuts, wireless service revenues, wireless revenues and total revenues declined. Compared to the first nine months of 2012, wireless service revenues fell by 0.9 percent, wireless revenues (including hardware business) by 0.4 percent and total revenues by 2.8 percent. Including mobile termination rates for the first nine months of 2013, wireless service revenues declined by 4.8 percent, wireless revenues by 3.6 percent and total revenues by 5.2 percent compared to the corresponding period in the previous year. In the third quarter, the operating income before depreciation and amortization (OIBDA) reached €292 million. This represents a decline of 14 percent compared to the corresponding period in the previous year, following increased commercial investments. The OIBDA margin for the third quarter decreased by 1.9 percentage points year-on-year to 23.8 percent. Telefónica Deutschland is continually investing in the future success of the company. Attractive mobile and fixed line products rely on a high-performance network and new technologies such as LTE. Total investments over the first nine months increased by 3.4 percent year-on-year to €468 million. Within this period, the investments into the LTE network have doubled. The Cash Flow pre dividends showed a stable year-on-year development in the first nine months of 2013. Due to a strong conversion from Operating Cash Flow to Free Cash Flow, the latter reached €543 million as of 30 September 2013, compared to €549 million at the end of September 2012. Based on this development, the company intends to propose to the General Shareholders' Meeting a cash dividend for the year ending December 31, 2013 of approximately €525 million, payable in 2014.
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Telefónica Deutschland Holding AG, listed at the Frankfurt Stock Exchange in the Prime Standard, and its wholly-owned, operationally active subsidiary Telefónica Germany GmbH & Co. OHG belong to Telefónica Europe and are part of the Spanish telecommunication group Telefónica S.A. The company offers its German private and business customers post-paid and prepaid mobile telecom products as well as innovative mobile data services based on the GPRS, UMTS and LTE technologies with its product brand O2. In addition, the integrated communications provider also offers DSL fixed network telephony and high-speed internet. Telefónica Europe has more than 103 million mobile and fixed network customers in Spain, Great Britain, Ireland, the Czech Republic, Slovakia and Germany.

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