"The market environment we find ourselves in continues to be highly dynamic and this can be seen in our financial results," says René Schuster, CEO of Telefónica Deutschland. "Our strategy with a focus on our profitable data business and wireless LTE technology is the right one."
The number of customer accesses (wireless, fixed network, wholesale) reached 25.3 million, representing an increase of 0.7 percent over the second quarter of the previous year. This number was boosted by mobile contract customer, the development of secondary brands and the prepaid segment.
Excluding mobile termination rate cuts, wireless service revenues, wireless revenues and total revenues declined. Wireless service revenues were down 1.3 percent compared to the second quarter of 2012, wireless revenues (including hardware business) decreased by 1.7 percent and total revenues had fallen by 3.8 percent. Including mobile termination rates, wireless service revenues were down 5.2 percent and wireless revenues displayed a decrease of 5.0 percent. Total revenues stood at €1.2 millard, 6.2 percent lower than in the second quarter of last year.
Customers continued to exhibit an intensive use of smartphones. Smartphone penetration is now 67 percent among O2 contract customers, 14 percentage points higher than in the second quarter of last year; and the new wireless LTE technology is further boosting this trend. In the second quarter of 2013, LTE-capable devices accounted for 40 percent of all devices sold.
Data business also continues to display strong growth. Non-SMS data revenues recorded double-digit growth in the second quarter, up 24.6 percent over the same period in 2012. Non-SMS data revenues as a percentage of total data revenues also increased significantly to 65.4 percent, representing a growth rate of 10.5 percentage points compared to the second quarter of 2012.
Non-SMS data ARPU (average revenue per user) is also significantly up at €4.1, 20.4 percent higher than in the second quarter of 2012.
"The trend in the first six months shows that Telefónica Deutschland is developing into a digital company with sustainable profitable growth," says Rachel Empey, CFO of Telefónica Deutschland. "The massive growth in data revenue is behind this trend."
The company achieved an operating income before depreciation and amortization (OIBDA) of €294.2 million in the second quarter of 2013. At 24.2 percent, the OIBDA margin in the second quarter of this year was on a par with the same period in 2012.
High-speed coverage and data usage continues to be key. The advance of the new wireless communication standard LTE means high-speed connectivity is now available in all major big cities in Germany. This is also reflected in the overall investment level, which was up 9.5 percent over the second quarter of last year.