Preliminary figures1) for the first nine months 2019:Telefónica Deutschland invests, posts stronger growth and exceeds 50 million accesses served
In the first nine months of the year, Telefónica Deutschland has set a high pace both in mobile and fixed communications segments. By the end of September, the company had gained almost one million net mobile subscribers. At the same time, the network operator was able to increase the number of fixed-network broadband accesses by 114,000 this year, continuing the upward trend begun in the middle of last year. As a result, the company's sales in the first three quarters rose by 1.4 percent to 5.43 billion euros. Mobile communications service revenue recorded the strongest increase since the merger with E-Plus in 2014. In order to further improve its network and make use of opportunities for further growth, Telefónica Deutschland has further increased its investment level since the beginning of the year. Adjusted for exceptional and regulatory effects, OIBDA rose moderately by 0.82) percent from January through September. The Company confirms its outlook for the current fiscal year. "Five years after the merger with E-Plus, we are stronger than ever before in both the mobile and the fixed-network markets. We are seeing a strong influx of customers and sales are improving every quarter. We want to build on this and continue to invest heavily in our network and products, which will be noticeable for our customers in the coming months," said Markus Haas, CEO of Telefónica Deutschland.
|1 million mobile subscribers added since the beginning of the year; 392,000 in the third quarter alone|
|Revenues increase by 1.4% in the first nine months; strongest growth in mobile service revenues since the merger with E-Plus|
|Outlook for the fiscal year 2019 confirmed|
|Access agreements enable best fixed-network broadband coverage in Germany|
|Markus Haas: "Five years after the merger with E-Plus, we are stronger than ever before in both the mobile and the fixed-network markets. We are seeing a strong influx of customers and sales are improving every quarter. We want to build on this and continue to invest heavily in our network and products, which will be noticeable for our customers in the coming months."|
Growth in customers and data continues unabated
In recent months, the company was once again able to accelerate growth. In the mobile business, both owned and partner brands saw strong demand. In the first nine months, Telefónica Deutschland gained 999,000 net mobile subscribers, 392,000 of them in the third quarter alone. Meanwhile, mobile data consumption has entered new dimensions. From January to September, growth was 52 percent compared to the same period last year. The extrapolated annual mobile data usage now exceeds one exabyte (1 billion gigabytes). The number of broadband accesses rose by 114,000 to 2.2 million since the end of December, primarily due to growth in high-speed VDSL connections. The total number of customer accesses broke through the 50 million mark in the third quarter and reached 50.13) million at the end of September. 45,73) million of these came from the mobile segment, where Telefónica Deutschland serves more people nationwide than any other provider. Thanks to its cooperation with Deutsche Telekom, Vodafone and now Tele Columbus, the company can offer the best fixed-network broadband coverage in Germany. No other provider in the country has such comprehensive access to a combination of cable and VDSL infrastructure.
Core business more robust than ever since the merger
Sales improved once again. Total revenues rose by 1.4 percent to 5.43 billion euros in the first nine months of 2019. In the past quarter, Telefónica Deutschland showed particularly strong growth of 1.9 percent. The main reason for this was revenue from mobile communications services, which grew by 1.6 percent year-on-year in the period from July to September. This means the company's core business is more robust than ever since the merger with E-Plus five years ago. Adjusted for the still considerable regulatory effects, growth was even stronger in each case. Sales of mobile handsets increased by 10 percent to 914 million euros in the course of the year to date. Revenues in the fixed-network business remained roughly stable in the third quarter compared with the previous three months at 185 million euros.
Significant investments to ensure further growth
Following the strong results from the first half of the year, the company continued to invest in new products, tariffs and more effective processes to further boost growth. Operating income before depreciation and amortization (OIBDA) increased by 25 percent in the first three quarters after adjusting for exceptional and regulatory effects. As in the previous quarters, this increase was due to the changeover to IFRS 16 bookkeeping requirements. Based on the old IAS 17 rules, the increase amounted to 0.8 percent. After the successful business development in the first nine months, the company confirms its forecast for the full year.
LTE rollout push continues
Investments in the network also increased through the end of September. Telefónica Deutschland has never set up LTE stations at the current rate. A new station is currently being commissioned or upgraded every 50 minutes in the O2 network. This year more than 3 million additional people have already been supplied with LTE by more than 7,000 upgraded stations. Investments (CapEx) rose 5.7 percent to 782 million euros in the first nine months as part of the network rollout push. Telefónica Deutschland plans to announce details of network investments for the coming years at a strategy update scheduled for 11 December 2019 in London. Net income for the period from January to September amounted to minus 180 million euros, compared with minus 123 million euros in the same period of the previous year. This was due to one-off charges from shortened depreciation periods in the course of the completion of the network consolidation in the first half of the year. In the third quarter, by contrast, the result showed a slight improvement compared with the same period of the previous year.
Highlights of the third quarter
From July to September 2019, Telefónica Deutschland reached numerous milestones. Here you will find a selection:
|O2 You heralds the end of rigid contract terms|
|Telefónica Deutschland and Tele Columbus to cooperate on cable and fibre-optic connections|
|"My O2"-App gets rated as "very good" once again|
|Independent expert intends to fully confirm Telefónica Deutschland's charges for network access from 1&1 Drillisch|
|Network operators agree on national wireless pact|
|Telekom, Telefónica and Vodafone start offering secure login procedure without password|
|Note: Unless otherwise indicated, the financial data and comparative figures published in this document have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union (EU). Accordingly, the key financial figures for 2019 include the effects of IFRS 16 implementation as of January 1, 2019. Further detailed information on the financial result is available at https://www.telefonica.de/financial-publications 1) Unless indicated otherwise, all financial KPIs and year-on-year comparisons published in this document are prepared in accordance with IFRS accounting standards as adopted by the European Union. Financial KPIs for 2019 therefore include the effects of the implementation of IFRS 16 as of 1 January 2019 2) Comparison on the basis of IAS17 3) Includes mobile accesses with a maximum inactivity period of six months.|