Telefónica Cranks up Capex

Telefónica forecast positive revenue growth in 2014, after managing to increase revenues by 0.7% on an organic basis to 57.06 billion euros in 2013. In the fourth quarter, revenues rose 1.8% on an organic basis thanks to double digit growth in the Latin American market.

Telefónica also said its capex to sales ratio will rise to between 15.5% and 16% in 2014 from 14.5% last year. It plans to increase spending on its fibre networks by 65% in 2014 and its LTE budget is up 27% on 2013.

"Telefónica will reinforce the differentiation of its products and services through a non-replicable infrastructure," said César Alierta, Executive Chairman. "In 2014 Telefónica will double the fibre coverage in Spain to 7.1 million homes passed, reaching the highest coverage levels among the largest economies in Europe. In Brazil we will also increase fibre coverage to 2.5 million homes. In the mobile business, we will expand 4G usage in Europe reaching an average coverage of more than 50%, while we continue leading the mobile data market in Latin America with the progressive launch of 4G. source: Telefónica presentation.

Ericsson Reports Rapid Rise in Mobile Subs and Traffic

Ericsson said the number of mobile subscriptions worldwide rose by 109 million in the fourth quarter of 2013 to 6.7 billion. However, the leading network equipment supplier said the actual number of subscribers is about 4.5 billion, since many people have several subscriptions.

Ericsson also reported that about one billion smartphones were sold in 2013. "This device represented close to 60% of all mobile phones sold in Q4 2013, compared to around 45% in Q4 2012," it added. "Of all mobile phone subscriptions, around 30% are associated with smartphones." source: Ericsson report

WhatsApp Adding One Million Users a Day

Announcing it will buy WhatsApp for $19 billion in stock and cash, Facebook said that more than 450 million people are using the mobile messaging service each month. The social network said that 70% of these people are active on a given day. It also claimed that WhatsApp's messaging volume is approaching the "entire global telecom SMS volume" and WhatsApp is currently adding more than one million new registered users per day. source: Facebook statement

Industry analyst Ovum forecasts that "social messaging volumes" will reach 69 trillion in 2014 (up from 27.4 trillion in 2013) with subscribers climbing to 1.8 billion by the end of the year.  Ovum also said that telecoms operator-based mobile messaging traffic (including MMS, SMS, A2P SMS) will peak in 2014 with 7.7 trillion messages, declining in 2015 to 7.6 trillion messages. source: Ovum statement

Brazil and U.S. Buoy America Movil

America Movil reported a 7.8% increase in revenues, at constant exchange rates, to 204 billion Mexican pesos (15.3 billion U.S. dollars) in the fourth quarter of 2013. The pan-Latin America telco said that mobile data and PayTV were the main drivers of revenue growth, increasing 18.8% and 21.8%, respectively, at constant exchange rates. In the U.S., revenues were up 13.8% to 1.54 billion U.S. dollars and in Brazil 10.9% to 8.79 Brazilian reals (3.63 billion U.S. dollars).

The company said: "service revenue growth in the South American block remained strong—although it moderated somewhat from the prior quarter mostly on account of the deceleration that has taken place in Colombia—and remained stable, at 4.1% in Central America and the Caribbean. In Mexico it picked up from -2.1% in the third quarter to -0.6% in the fourth, possibly reflecting the beginning of an economic recovery in the country." source: America Movil statement

Europe Hits Vodafone Hard

Vodafone said its group revenue declined 4.3% year-on-year on an organic basis in the quarter ending December 31 to 10.98 billion British pounds (17.94 billion US dollars). Service revenue fell 9.6% on an organic basis in Europe, but rose 5.5% in Africa, the Middle East and Asia Pacific. 

Vittorio Colao, CEO, said: “Our emerging market businesses are growing strongly, supported by consistent execution and accelerating demand for data. In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency. In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases (see graphic)." 

Capital spending rose 20% year-on-year to 1.8 billion pounds in the quarter.  Colao added: “During the quarter we have made further progress in executing our long-term strategy. Project Spring, our £7 billion organic investment programme, will accelerate our plans to establish stronger network and service differentiation for our customers, with the first elements of the programme already initiated.” source: Vodafone statement