Telefonica has reported its fourth quarter earnings, and all the headlines are screaming that profits fell by 12 percent (such as at Bloomberg). The fall in profits was attributed to a program of encouraging retirement to become more competitive. The earnings release claimed that “revenues grew 41.5% and net profit was over Euro 6,233 million, up 40.2% vs. 2005.” All in all the results seem good, net income for its mobile business exceeded analyst expectations. “Annual Latin American sales increased 14 percent to 9.54 billion euros and revenue at Telefonica Moviles, the group’s cellular phone division, rose 11 percent to 18.4 billion euros in 2006, the company said. O2 added 13.16 billion euros in sales to the group’s full-year revenue of 52.9 billion euros.”
From the earnings release, Telefonica now has more than 145 million mobile customers.
Its UK subsidiary O2 saw growth in its ARPU due to “continued growth in data ARPU coupled with broadly stable voice ARPU”.
Earnings Release PDF
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