Telefónica Europe has described its Q3 results as “solid”, after growing its total customer base 5% year on year, seeing revenues decline by between 0.4-0.8% in organic terms, and total ARPU decline 5.7% year on year in the first nine months, dropping 6.7% in the third quarter.
Across Telefonica’s operating units, roughly the same picture pertains. Voice revenues and, in some cases, traffic, declines (except in Germany). Data shows strong growth, but not enough to stave off ARPU declines.
The operator now has 57.8 million customers across all its European operations (excluding Spain), with mobile broadband customers now representing 29% of the total base, an increase of 5% year on year — a number that has contributed to a rise in total mobile data revenues of 12.3%.
Mobile data revenues (including P2P SMS) accounted for 41% of all mobile service revenues in the first nine months of 2011, against 36% in the first nine months of 2010. Non-P2P SMS data revenues grew 36%, to account for 43% of all mobile data revenues.
Telefonica said the growth in non-SMS data revenues were as a result of the “successful” deployment of tiered pricing. Although data continues to grow greatly as a share of revenues, data ARPU grew by a more modest 6%, from €10.1 for the first nine months of 2010 to €10.5 for the first nine months of 2011.
In the UK, where O2 now has 22.2 million customers, plus an additinal 2.8 million through its JV with Tesco Mobile, mobile voice traffic deceased 8% year on year, with data traffic increasing 22%. Total ARPU declined 5.7% year on year.
In Germany, where O2 has 18.1 million customers, mobile voice traffic was up 10% and data greatly up, rising 51% in the first nine months, Yet ARPU declined 8.7% year on year.
In the UK and Germany Telefonica said that MTR cuts were partly or mostly responsible for falling ARPU.
In the Czech Republic, ARPU decreased 9.4% year on year, again affected by MTR cuts,
In Ireland total ARPU declined 9.5%, although that would have been a 2.3% decline excluding MTR cuts, the operator said. Data revenues grew 8,2% in the first nine months, although that was “more than offset” by declining voice revenues.
Earlier this week Vodafone released results for the first six months of its financial year (to 30 September) showing that at Group level results were slightly up, although the situation in Spain, Italy and Greece offset European gains in the UK and Germany.
Like Telefonica, the operator reported a rise in data revenues, with data revenue up 23.8% year-on-year to £3.1 billion, and now representing 14% of Group service revenue.
Voice revenues were down from £13,7 billion to £13.3 billion to for the six months to September 30. Messaging revenue rose slightly, from £2.4 billion to £2.6 billion, and fixed line revenues grew from £1.6 billion to £1.8 billion.
In Europe, service revenue was down 1.3%) in H1, with a marginally better performance in Q2 than in Q1. In northern Europe, service revenue growth in Q2 improved in the UK (+2.5%) and the Netherlands (+4.2%), and remained steady in Germany (+0.1%). In southern Europe, Spain showed a sequential improvement in its service revenue trend to -9.3% (Q1 -9.9%).
Growth in Italy deteriorated from -1.5%) in Q1 to -3.0%) in Q2, reflecting a decline in consumer confidence and an incremental impact of 0.4 percentage points from MTR cuts. Turkey continued to grow strongly in Q2 (+24.0%).
Europe EBITDA was flat year-on-year at £5.6 billion, with the EBITDA margin down 1.0 percentage point. Vodafone said that this decline was almost entirely driven by a 6.1 percentage point margin decline in Spain as a result of price reductions and the macroeconomic environment.