Telefonica Staggers in Spain

Telefonica said its revenues increased 0.1% year-on-year on an organic basis in the first quarter of 2011 to 15.51 billion euros. A 6.9% decline in revenues in Europe offset a rise of 7.8% in Latin America. In Spain, revenues were down 10.7% and in the U.K. by 6%, but in Germany revenues climbed 2.5%

César Alierta, executive chairman, said: "In Spain, we pioneered the elimination of handset subsidies for new customers, taking a significant step towards a far-reaching transformation of the commercial structure of the market. This move, alongside the agreement reached with Mozilla to develop smartphones based on the open HTML5 system and the increased drive towards integrated tariffs and tiered pricing are clear examples of our strategy to transform the business model within the new digital environment. Additionally, Telefónica Digital is already delivering new innovative services adapted to the new usage patterns of our customers."

He added that he expects Telefonica's performance to accelerate "noticeably in the second half" and the group reiterated its earlier financial and operational guidance for 2012.

Telefonica said that is mobile broadband connections grew 55% year-on-year to 41 million at the end of the first quarter, accounting for 17% of total mobile connections. In Latin America, mobile broadband connections doubled year-on-year. In Europe, smartphone penetration among the Telefonica customer base now stands at 30% (+9 percentage points year-on-year). source: Telefonica statement