Telefónica Deutschland confirms 2020 outlook after Q1 growth

Telefónica Deutschland was in confident mood as it unveiled its results for the first quarter of 2020, reporting stronger revenue and earnings growth compared to previous quarters.

Although the German operator was sufficiently encouraged by the results to confirm its outlook for the full year, it acknowledged that much uncertainty still lies ahead by saying it will continue to monitor and analyze the effects of COVID-19. Germany has suffered far fewer COVID-19 deaths than several of its European neighbors, and it has started to lift some of its lockdown restrictions, but the need for caution is still being stressed.

For the first quarter of the year, Telefónica Deutschland reported a 3.8% increase in revenue, to €1.85 billion (US$1.99 billion), and a 1.6% rise in adjusted operating income (OIBDA), to €532 million ($574 million). The operator noted that this was the strongest increase in revenue since its merger with former rival E-Plus in 2014. Its net loss for the quarter also narrowed noticeably, to €44 million ($48 million), from €107 million ($116 million) in the same period last year.

The operator's bottom line was boosted by growth in both mobile and fixed subscribers, as well as stronger takeup of premium tariffs. Mobile services revenue rose by 2.4%, to €1.31 billion ($1.41 billion), and fixed revenue increased by 6%, to €193 million ($208 million).

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Markus Haas, CEO of Telefónica Deutschland, indicated that the operator will launch its 5G network in the second half of 2020. The move will represent a new chapter for the company, which has spent the last several years grappling with the integration and expansion of its two formerly separate LTE networks.

According to Reuters, Haas also said during a conference call that the operator is looking into the sale of more of its German towers. Telefónica is already said to be in talks to sell up to 10,000 towers to Telxius for €1.5 billion ($1.6 billion), according to an Expansion report in April 2020. Telefónica is understood to still own a 50.01% stake in the tower management company.

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— Anne Morris, contributing editor, special to Light Reading

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