If last week we knew the financial results corresponding to the first semester of 2020 of Vodafone Spain, the Eukaltel Group and the MásMóvil Group, today it was the turn of Telefónica and Orange Spain. The latter, as expected, has seen a drop in his income compared to the same period last year.
According to the company itself, this reduction has been due to « the partial stoppage of its activity due to the COVID-19 crisis and the general drift of the industry towards the low cost segment. « However, from Orange Spain they expect the situation to reverse in the second quarter and, for this, they plan to carry out a commercial boost with offers converging across brands (including Simyo as of September).
Income and profitability drop
The stoppage due to the COVID-19 crisis in the Orange Spain business has had an impact on the results of the company, which has registered a 70 million euro drop in revenue. During the first half of the year, it reached total revenues of 2,503 million euros, which is 4.6% less than in June 2019. The second quarter of the year was especially hard, the period in which the company billed 1,216 million euros with a year-on-year decrease of 6.8%.
The pandemic has also had its effects on the profitability of Orange Spain, which registered an EBITDA of 728 million in the total for the semester, 7.5% less than in the same period of 2019. From January to June 2020, the company invested a total of 392 million euros, mainly intended for the deployment of new generation, fixed and mobile infrastructures. However, they acknowledge that investments have decreased almost 26% compared to the same semester of the previous year, due to the partial stoppage of activities during the alarm state.
Wholesale services continue with significant growth and the turnover derived from this activity amounted to 449 million euros as of June 30 (7.6% more than a year ago). The growth of 10.4% in the last quarter stands out, reaching 229 million euros.
In this sense, convergence registered revenues of 1,020 million euros in the first half of the year, with a reduction of l2.8% compared to 2019. In the second quarter of 2020, convergence contributed 502 million euros (3.1% less). In any case, the converging ARPU of the Orange brand group remains stable from year to year, at 57.5 euros.
From January to June, Orange’s only fixed services revenue in Spain reached 238 million euros, with a 6.1% decrease compared to 2019. In the second quarter, those same revenues reached 114 million euros, which than translates into a 10.8% drop, especially due to the paralysis of the fixed portabilities during the alarm state, according to the operator.
If we look at revenues from mobile-only services, we see that during the first half they accounted for 517 million euros, 11.5% less than the same period last year, while from April to June they decreased by 13.1%, until reaching 250 million.
Target: 18 million households with fiber in 2023
As of June 30, 2020, Orange’s subsidiary in Spain has 19,829,000 customers, of which 15,863,000 are from mobile services and 3,966,000 from fixed broadband (85% of them in convergent mode). Of the latter, 3,192,000 clients of the company already enjoy its FTTH services.
Regarding the deployment of its own fiber in Spain, Orange already covers 15.1 million homes with its network, and over the past year, the company has expanded its fiber footprint by 673,000 real estate units. Therefore, it maintains its goal of reaching 16 million households with Orange FTTH technology at the end of this year and has approved the expansion of its deployment plans to 18 million households in the next 3 years.
In mobile telephony, Orange ended June 2020 with 15.9 million customers (3.2% less year-on-year) -, of which 13.7 million are contract customers -with a growth of 0.1% – and 2.2 million prepaid. Orange’s contract customers now exceed 86% of the total mobile portfolio, boosted, says the operator, by the new unlimited offers by Orange and Jazztel.
4G users reach 10.918 billion (almost 69% of the mobile customer base) with a growth close to 1% compared to the previous year. Actualemnte, Orange 4G coverage is 97.3% of the population Spanish, while the Orange network serves 2,120,000 virtual mobile operator clients with whom it has reached agreements.
As for Orange TV, the Orange platform added 672,000 subscribers at the end of the semester, 1.2% more than the previous year. Thanks to the growth in consumption during the months of confinement, and despite the paralysis of soccer competitions, the penetration of this service has grown to almost 17% on the company’s total broadband customer base.