Video services

Telefónica: Big IPTV Numbers. Big Profits

Telefónica SA (NYSE: TEF)'s domestic IPTV penetration rate is on the rise, with more than 11 percent of its broadband customers in Spain now opting for the carrier's TV-over-broadband service, according to figures released by the carrier today. (See Telefónica Reports 1Q08.)

And it's not just the operator's telco TV penetration rate that's increasing -– Telefónica today reported an increase in its revenues, profits, wireline ARPU, and overall global customer base in the first quarter of 2008.

At the end of March the carrier had 554,045 IPTV customers in Spain, having signed up an extra 43,000 customers to its TV-over-broadband service during the first quarter. That total will be enough to keep Telefónica in the Top 10 IPTV Carriers ranking that Light Reading is set to update shortly. (See Top Ten: IPTV Carriers.)

With the carrier boasting nearly 4.84 million retail broadband subscribers at the end of the quarter (for a Spanish retail broadband market share of 57 percent), its IPTV penetration rate (the percentage of broadband customers signed up for IPTV services) stood at 11.46 percent.

That's an increase of more than a whole percentage point compared with a year earlier, when its IPTV penetration rate stood at 10.42 percent. (See the table below.)

Table 1: Telef�nica's IPTV Penetration Rate, Q1 2007 - Q1 2008
Q1 2008 Q4 2007 Q3 2007 Q2 2007 Q1 2007
IPTV subscribers 554,000 511,100 469,100 450,900 418,600
Retail broadband subscribers 4,836,000 4,614,000 4,381,000 4,232,000 4,022,000
IPTV penetration rate 11.46% 11.07% 10.71% 10.66% 10.42%

That increase, and the carrier's continued broadband growth -– it added 222,000 DSL customers in the first quarter –- helped Telefónica to increase its monthly wireline ARPU (average revenue per user) to €68.20 ($105.54), 2.4 percent better than a year earlier.

However, growth in the Spanish broadband market is slowing down. Telefónica estimates that the total market grew by about 400,000 in the first three months of 2008, taking the total to about 8.5 million, but that growth is down sharply (by about 13 percent) compared with the 460,000 broadband additions reported for the first quarter of 2007.

In the first three months of this year, Telefónica's revenues totaled €13.9 billion ($21.5 billion), a year-on-year increase of 1.1 percent. The carrier's domestic market generated €5.13 billion ($7.94 billion) in sales, its Latin American operations delivered €5.15 billion ($7.97 billion) in revenues, and its other European businesses reported revenues of €3.47 billion ($5.37 billion).

Net income totaled nearly €1.54 billion ($2.38 billion), an increase of 22.4 percent compared with a year ago.

Telefónica has 233.5 million customers worldwide (up 13 percent), including 171 million mobile and 10.8 million broadband customers.

— Ray Le Maistre, International News Editor, Light Reading

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