Telefónica counts the cost of transformation

News

Telefónica recorded a loss of €443 million in Q3 on revenues that rose 1.7% to €11.9 billion, missing analysts’ predictions.

This is compared to Q3 2018, when the company recorded a €1.14 billion profit – a fall of 31.8%. 

Telefónica put the loss largely down to restructuring costs of €1.876 billion (mainly in Spain) relating to redundancies, transformation and simplification.

The company reported “solid performance” in key markets including Spain, Germany and Brazil, with sales in the UK up 1.4%. Telefónica saw digital revenues of €1.939 billion, up 17.4% on the previous year.

Net debt stood at €38,293 billion, down 8.1% year-on-year. The company also highlighted its progress with fibre roll-out, with its ultra-fast fibre reaching 123 million premises. Of these connections, 54.5 million run through Telefónica’s own network.

Plans to monetise infrastructure

José María Álvarez-Pallete, Chairman and CEO (pictured), said, “We made good progress on key strategic initiatives to simplify our business this quarter, including a workforce restructuring programme in Spain.

“We are forging ahead with plans to monetise further our mobile telco infrastructure, making more efficient use of our networks by sharing them, whilst adding new partners to enrich the value of our commercial offer in the home.”

He added, “Telefónica remained focus on deploying next-generation networks in our markets, improving our 4G coverage and launching 5G selectively, as we have in the UK.

“Looking ahead, we reiterate our guidance for this year and are confident that our digital transformation will boost returns and deliver the best technological solutions for our customers.”

In September, Telefónica said it was speeding up plans to monetise its tower portfolio.