MADRID Feb 13 Telefonica said on
Wednesday that margins in its Spanish business in the final
quarter of last year were among its best ever thanks to a new
bundled offer that stabilised customer losses and to suspending
smartphone subsidies in March.
"The last quarter was one of the best in our history in
terms of commercial activity and also in terms of better
margins," Luis Miguel Gilperez, president of Telefonica Spain,
The company is facing an uphill battle in its home market,
where a prolonged recession and a 26 percent unemployment rate
have crushed consumer confidence. Telefonica's domestic revenues
fell by 13 percent in the first nine months of 2012.
The group reports results on Feb. 28 and investors want to
see whether it has managed to stem the decline in its
increasingly competitive home market, where it shed over 3
million mobile customers in 2012.
Gilperez said the October launch of Telefonica's "Fusion"
package offering combined Internet, television, mobile and fixed
lines services, had improved customer loyalty, helped take
600,000 mobile contracts from competitors and boosted its
broadband market share.
He said 1.5 million people had already signed up for the new
offer by the end of January, with nearly 15,000 people
subscribing to the offer daily.
"In order to improve investors' perception of the company,
it is crucial to moderate the deterioration suffered in the
domestic market," Madrid-based broker Ahorro Corporacion said in
a note to clients on Wednesday.
According to data from Spain's telecoms regulator, while
Telefonica's share of the mobile market shrank to 36.5 percent
from 40 percent over 2012, broadband figures have improved since
the launch of Fusion, with Telefonica attracting 42,780 new
customers in December.
"For the first time in many quarters we have gone back to
being the leaders in capturing new broadband business," Gilperez
said. Telefonica attracted 125,000 new broadband customers in
the fourth quarter and has 48.3 percent share of the market.
The former monopoly halted subsidies on smartphones in March
and was followed by Vodafone, which then reversed the
decision after heavy customer losses. Telefonica says it will
not go back on the decision, which has helped margins.
Mobile customers defected to Orange, which still
offered smartphone subsidies, and cheaper virtual mobile
operators, which rent network space from established players.
Virtual operators' share of the market grew to 8.92 percent at
the end of 2012 from 6.33 percent a year earlier.
Vodafone's third quarter results last week showed the
challenges facing operators in Spain. The company reported an 11
percent drop in service - phone calls, messages and data -
revenue and has said it will lay off staff in Spain.
Gilperez also said Telefonica would intensify its efforts to
roll out fibre optic Internet, which offers faster speeds, to
reach 8 million Spanish households by 2015.