Strong growth of wireless data revenues across its Latin America business helped push Telefónica‘s 2011 total consolidated revenues up 3.5% in 2011 to $84.56 billion, which was in line with analyst estimates, and net profits of $7.27 billion.
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Latin America accounted for 47% of Telefónica’s total consolidated revenues in 2011. At the end of last year, Telefónica counted approximately 201 million access lines in the region, which was a 10% year-over-year increase and the third quarter in a row for such growth. The carrier cited higher commercial activity in the second half of the year, with record levels of customer acquisition during the fourth quarter. Telefónica said Q4 growth was its strongest since 2007, despite higher market penetration.
Telefónica said it expects to post a net financial debt to operating interest before depreciation and amortization ratio 2.35 times in 2012. For 2011, Telefónica’s net debt to OIBDA was at 2.46 times.
“We have continued to make advancements in the diversification of our business, reinforcing greatly our position in Latin America, while our business in the region already accounts for over 45% of revenue, OIBDA and operating cash flow of Telefónica. The commercial effort done in the last months is already positively impacting revenue evolution with growth rate showing a significant acceleration in the fourth quarter to 6.3% year-on-year in organic terms and excluding the impact from lower mobile termination rates. We have strengthened our leadership in the key market of the region, Brazil, which has become our major growth engine and yields tremendous potential for the future,” said Telefónica Chairman César Aliert in a statement.
Telefónica’s Latin American operations reported a 13.5% growth in 2011 revenues, hitting $39.33 billion. The year-on-year financial results reflected the full consolidation of Vivo beginning in October 2010. Previously the company’s results were proportionately consolidated.
Brazil reinforced its position as the region’s largest market, accounting for 49% of Telefónica’s revenue in the region last year, and as the main driver of organic growth in Telefónica’s revenues across Latin America, which increased 2.6 percentage points.
Operating expenses across its Latin America operations totaled $26.01 billion, OIBDA stood at $14.73 billion with an OIBDA margin of 37.4%, and capital expenditures amounted to $7.13 billion in 2011.
Among other Latin America highlights, Telefónica noted that mobile access lines increased 11% year-over-year to 166 million, with significant acceleration during the fourth quarter. Net additions for the year totaled 18.4 million lines, excluding the disconnection of 1 million inactive prepaid lines in Brazil at the end of the fourth quarter and 360,000 access lines in Chile during the third quarter.
Mobile broadband growth surged 114% year-over-year, accounting for 10% of the Telefónica’s mobile access lines in the region (+5 percentage points year-on-year), following net additions of 8.7 million new mobile broadband accesses boosted by a substantial expansion of smartphones, where the base tripled with respect to 2010.
Data revenue consolidated in 2011 as one of the Telefónica’s main growth levers, and increased by 32% in organic terms (+31% in the quarter), fuelled by a larger portion of mobile broadband customers. Data revenues now account for 26% of mobile service revenues in the region, being particularly note worthy the growing contribution by non-SMS data revenues, which now represent 53% of total data revenues.
