Telefónica’s Digital Pact will involve a great effort to promote the complete digitization of Spain. Among the commitments, that fiber optics cover one hundred percent of the country and be leaders in the implementation of 5G technology. The operator points out that all this could have an annual impact of approximately 1.8% of GDP until 2025 since fiber and 5G are a crucial element in moving towards digital and sustainable societies and economies.
This has been confirmed at the same time as the results of the second quarters were presented, irreparably marked by the financial impact of COVID-19, but also by the depreciation of the currencies. Despite everything, the company maintains its fiber deployment target, the forecasts for the year and the dividend corresponding to 2020.
Movistar Q2 2020 Results
Globally, Telefónica has obtained a net profit of 831 million in the first half of this year, which is 53% less than in between January and June 2019. Already focused on Spain, the income for the second quarter of the year was 3,028 million euros, which is 5.2% less than in the same quarter of the previous year. The most affected segments have been terminal sales income, which fell by 50.2% and retail income, which fell by 5.4%.
For its part, wholesale revenue increased 3.3% year-on-year despite the reduction in roaming. HE OIBDA in the second quarter it was 1,211 million euros, falling 8.9% compared to the previous year due to lower income, lower costs associated with this period and the efficiencies generated. This includes 51 million euros saved from the restructuring plan.
At the commercial level, Movistar lost fixed broadband clients, although it increased 7.4% fiber optic. In mobile phones, it managed to grow 1.4%, although prepaid customers fell 19.5%. Pay TV also suffered with 1.3% less customers. FTTH wholesale access continues to grow with 26.7% more than the previous year.
Telefónica sells its business in Costa Rica to Liberty Latin America
In another order of things, Telefónica has confirmed that it sells all the capital stock of its operation in Costa Rica to Liberty Latin America. The sale agreement involves a multiple of 7.4 times OIBDA. According to the company, this is in conjunction with other businesses closed in Central America last year. The capital gains generated will be around 210 million euros.
The operation will help reduce the Telefónica group’s net debt by approximately 425 million euros. The operator continues to comply with its roadmap that has designated several markets as priorities, while the rest are looking for an option to divest and dispose of assets.