Euronews: Telefónica's Profits Halved
Telefónica SA (NYSE: TEF), Ericsson AB (Nasdaq: ERIC) and Colt Technology Services Group Ltd proffer something for the weekend in today's trot through the regional telecom headlines.
Net profits for the full year at Telefónica have roughly halved year-on-year to €5.4 billion (US$7.2 billion), with staff restructuring costs in Spain taking a big share of the blame. Revenues were actually up 3.5 percent year-on-year, to €62.8 billion ($84.1 million), thanks largely to strong growth in Latin America. Unemployment in Spain is currently running at 23 percent, so an upturn in domestic fortunes may be some way off for the operator. (See Telefónica Posts €5.4B Profit in 2011, Euronews: Layoff Costs Tear Into Telefonica's Q3 , Telefonica's Profits Dip Jan-Sept and Telefonica Restructures, Creates New Units.)
Ericsson is about to complete an upgrade of 3 Italia 's mobile backhaul network, a project that saw the Nordic vendor wheel out its microwave Mini-Link products, its optical Smart Packet Optical (SPO) 1400 products and its SmartEdge 600 Multi-Service Edge Router. Downlink speeds of 42 Mbit/s for the operator's customers are being confidently predicted on completion of the project. (See 3 Italia Upgrades With Ericsson, Euronews: Ericsson Bags Backhaul Deals and Ericsson Suffers Margin Crunch.)
Colt, the pan-European services provider, suffered a 38.5 percent fall in net profits to €62.3 million ($83.4 million) in 2011, though it attributed this mainly to tax and depreciation expense quirks. (See Colt Reports Profit of €62.3M, Euronews: Colt Creates Cloud Accord, Interview: Mark Leonard, Colt's Bridge Builder and Colt Extends Euro Cloud Services.)
Like Telefónica, Telecom Italia (TIM) is having problems on its cash-strapped home turf, with sales down 5.2 percent domestically year-on-year in 2011. And, like its Spanish rival, the Italian operator is being buoyed by its Latin American units -- revenues at its Brazilian business, for example, increased by 18 percent. Overall, EBITDA (earnings before interest, tax, depreciation and amortization) was up 7.3 percent year-on-year. (See Euronews: Telecom Italia Boss Thinks Positive and (doclink 214533}.)
A of Xavier Niel, the man behind Gallic mobile challenger Guardian profile Iliad (Euronext: ILD), reveals that the "French Steve Jobs" has his own way of working. To coincide with the launch of Iliad's Free mobile service last month, Niel, who has a colorful past -- see Not So 'Jolly' and Sex Shocker Socks Stock -- arranged for a large truck bearing the legend "We are not gypsies" to be parked outside the headquarters of rival firm Bouygues Telecom . The message was a riposte to the comment by Martin Bouygues, the rival firm's owner, that Free mobile were "gypsies camped on the lawns" of his chateau. Zut alors! -- it's all more fun than balance sheets... (See Iliad Disrupts the French Mobile Scene and Euronews: Iliad's Clogging Our Network, Says FT.)
— Paul Rainford, Assistant Editor, Europe, Light Reading