Telefónica Hispam's mobile accesses (+1.6%) and fiber optic accesses (+17%) grow in the third quarter of 2024

By Telefónica

This is an automated translation of the press release issued in Spanish

Telefónica Hispanoamérica improved its operating indicators focused on implementing the Group's GPS strategic plan during the third quarter of 2024. In the fixed segment, the company reached 5.1 million fiber optic accesses to the home during 3Q24, a year-on-year growth of 17% in which the progress of the operations in Argentina (+18.3%), Colombia (+26%) and Peru (+42.7%) stand out.

In addition, at the end of 3Q24, the company reached 22.4 million homes and businesses with the possibility of contracting or migrating to fiber optics to the home (FTTH) and cable, a year-on-year growth of 15.1%. This figure was driven by the FiberCos companies in which Telefónica has a stake, such as Chile, Colombia and Peru.

In the mobile segment, the company reached 98.4 million total mobile accesses, an increase of 1.6% compared to the third quarter of last year. In the case of prepaid, there was an increase of 2.5% of accesses, while in postpaid (contract) it was reduced by 3%. This was due to the toughening of the competitive environment in Colombia and Chile, as well as the economic situation in Argentina. It is worth highlighting Mexico, a country where postpaid (contract) accesses increased by 9% year-on-year.

Financial indicators

In the third quarter of 2024, revenue reached €2.1 billion, a 6.2% year-on-year decrease due to competitive aggressiveness in some countries, as well as a significant drop in mobile equipment sales and currency depreciation in countries such as Mexico and Chile.

On the other hand, EBITDA stood at 377 million euros, a decrease of 7.4% compared to the same period of the previous year due to the results in Peru and the aforementioned exchange rate effect, among other points.

It is worth highlighting the growth of EBITDA this quarter in Argentina, where it increased by 28.9% compared to the same period last year.

Inorganic options

In line with its strategy to continue building value for its shareholders and operate sustainably, at the end of July Telefónica Hispanoamérica signed a non-binding agreement with Millicom to explore the combination of their operations in Colombia, in order to create a player with the size, networks and offerings to benefit Colombian customers. This potential transaction is subject to the signing of definitive agreements between the companies and obtaining the corresponding regulatory approvals.

On the other hand, in September América Móvil and Telefónica signed a non-binding agreement to jointly explore their potential participation in the sale process of WOM SA's assets in Chile and its affiliates in the context of its Chapter 11 reorganization process pending before the United States Bankruptcy Court for the District of Delaware.

Both processes are pending further progress.

Building a sustainable and connected future

In line with its commitment to inclusion and diversity, the company was recognized with the “Pioneering Initiative” award for its “Women in Network” program at the Latam Inclusive Tech Awards (LITA), promoted by the organization Laboratoria. The objective of “Women in Network” is to promote the employability and training of women in technical telecommunications work. Through this program, since 2020 more than 1,000 technicians have been trained and hired by Movistar partner companies in Colombia and Peru.

On the other hand, Telefónica Hispanoamérica continues to advance in the technological renovation of its fixed networks, removing those based on copper and deploying fiber optics to the home, in line with the Climate Action Plan (zero net emissions by 2040) and the Circular Economy Plan (zero waste by 2030). In this regard, the company removed more than 30 thousand tons of copper cable between 2022 and 2023, and aims to reach more than 25 thousand tons of copper in 2024 between operations in Argentina, Chile, Colombia and Peru. This withdrawal of copper networks will mean an estimated saving of 14.6 GWh in 2024, which is equivalent to the average annual consumption of approximately 6,900 homes.

In this regard, it is worth highlighting the case of Peru, where Telefónica reinforced its leadership in sustainability by guaranteeing, through the I-REC and AENOR certifications, the use of 100% renewable energy in all its operations nationwide. The new contract with Statkraft renews the alliance for 5 more years and ensures the supply of electricity from renewable sources.

In Mexico, progress continued to be made in recycling by dismantling the access network. To date, 763 tons of waste electrical and electronic equipment (WEEE), 160 tons of ferrous waste, 0.6 tons of batteries and 0.2 tons of air conditioning units have been recycled. In addition, in Colombia, two loans linked to the scope 1 and 2 emission indicator were signed with Banco Itaú and Scotiabank; thus, 28.5% of the company's debt in that country is linked to sustainability indicators.

Finally, in Argentina, the External Audit process for the renewal of the ISO 14001 certificate for the Integrated Management System was completed; and, in Chile, the local operation ranked first in the “Transport, logistics and telecommunications” industry in the Business Sustainability Ranking.

Evolution by country

• Chile. Results continued to be impacted by a very aggressive competitive environment in the mobile and fixed segments, as well as by the depreciation of the Chilean peso. However, in 3Q24 there was an improvement in the year-on-year trend, mainly in local currency EBITDA, thanks to efficiencies and improved mobile revenues .
• Peru. Revenues fell 12.6% year-on-year in 3Q24, mainly affected by the aggressive competitive environment in fixed and mobile (where there was another historic record in portability). The progress of the deployment of fiber optics to the home (with a 43% year-on-year growth), the containment of churn and the growth of gross additions stand out. EBITDA in the third quarter fell 61.1%, reflecting the performance of revenues.
• Colombia. Fiber optic accesses to the home continue to grow at a good pace (+26% year-on-year) reaching 1.4 million connected (94% of total fixed broadband). Revenues in 3Q24 reflected the aggressiveness of the mobile market and lower B2B projects. In the January-September 2024 outlook, the company's revenues increased by 1.8% and EBITDA by 9.7%, compared to the first nine months of 2023.
• Mexico. Results are impacted by the depreciation of the Mexican peso in 3Q24. However, revenues in local currency grew by 2% and service revenues by 5.9% thanks to mobile postpaid (contract). In the view from January to September 2024, the company's revenues increased by 1.6% and EBITDA by 9.2% versus the same period last year.
• Argentina. Revenues in 3Q24 grew 11.3% year-on-year due to the increase in accesses, mainly fiber optic access to the home, as well as the progressive updating of commercial plans which, together with cost efficiencies (growth below inflation), led to a 28.9% growth in EBITDA in this period of the year.

About Telefónica Hispam:

Telefónica is one of the largest telecommunications service providers in Latin America. The company, which operates under the Movistar brand, offers fixed broadband connectivity services - with FTTH solutions - and mobile with 4G and 5G networks, as well as a wide range of digital services for 112 million residential and business customers in the region. Telefónica Hispam offers its services in: Mexico, Colombia, Venezuela, Peru, Ecuador, Uruguay, Chile and Argentina.