Deutsche Telekom Targets Two Percent Growth

Deutsche Telekom reported a 6% year-on-year rise in revenues in the fourth quarter of 2014 to 17 billion euros on an organic basis. For the first time since the Germany operating segment was established, Deutsche Telekom reported quarterly revenue growth in its home market. Revenue in Germany was up 2% year-on-year to 5.7 billion euros. In the U.S., T-Mobile USA lifted revenues 18% to 8.1 billion US dollars, as the total number of customers increased by 2.1 million to more than 55 million (see slide below).  

Deutsche Telekom said it plans to achieve compounded average organic revenue growth of 1% to 2% per year for the financial years 2015 to 2018, while increasing investments in property, plant, and equipment by an average of 1% to 2% per year. It also hopes the ROCE (return on capital employed) of the group will exceed its cost of capital in the 2018 financial year. 

Deutsche Telekom's CEO, Timotheus Höttges, said: "Growth is our top priority. With massive investments in our networks...Integrated networks on the basis of all-IP and integrated offers for customers are the decisive factor for competitiveness in the future...Lean in production, fast and flexible in connecting partners, with easy access for customers, and all this Europe-wide – that is how we plan to become Europe's leading telecommunications provider." source: Deutsche Telekom statements

Telefónica Aims to Grow Revenues 7% in 2015

Telefónica forecast revenue growth of more than 7% in 2015 and more than 5% in 2016, after rising 3% to 50.4 billion euros in 2014 on an organic basis. In the fourth quarter of 2014, revenues were up 5%. Telefónica attributed the performance to "strong mobile data revenue growth in the quarter (+11% year-on-year), driven by non-SMS data revenues (+23%)."

Telefónica said that T. Hispanoamérica (+18% year-on-year organic) remains the main growth driver. Telefónica España's revenues declined 5% year-on-year in the fourth quarter - a marked improvement on previous quarters.

César Alierta, executive chairman, said: "The results in the quarter continued to demonstrate strong traction in the take-up of high-value services (fibre, Pay TV, LTE, Smartphones), producing a turnaround in the average revenue per access trend, which grew in 2014 for the first time in recent years."

The Madrid-based group also forecast that its capex/sales ratio will be 17% in 2015 and 2016, approximately the same as in 2014. source: Telefónica statement

Telecom Italia Targets Digital Identity and Security

Telecom Italia said its service revenues declined 4% year-on-year in the fourth quarter to 4.9 billion euros on an organic basis. That was an improvement on the 6% decline in the third quarter.  In the fourth quarter, service revenues fell 5% in Italy and 3% in Brazil.

Telecom Italia also announced its strategic plan for 2015-2017, which envisages a stepping up of its investment programme in both Italy and Brazil. It said: "Investments in Italy in the three year period 2015-2017 will total approximately 10 billion euros, around 5 billion of which solely for innovative developments (NGN, LTE, Cloud Computing , Data Centres, Sparkle and Transformation). By the end of 2017, Telecom Italia will reach 75% of the population with optic fibre, and over 95% with the 4G mobile network, positioning itself as leader in the infrastructure development of the country. In Brazil, total investment will be increased to over 14 billion reais (corresponding to over 4 billion euros, at current exchange rate)."

The telco also outlined what it sees as its role in the digital economy (see slides). It said: "Telecom Italia confirms its role as enabler of the new digital life, making available not only forms of entertainment in very high definition even on mobile devices, but also improving the daily lives of their customers (electronic government and healthcare, smart homes, digital identity, electronic payment systems)." source: Telecom Italia statement

Orange Close to Stabilising the Ship

Orange said its revenue fell 1% year-on-year to 10 billion euros in the fourth quarter of 2014 on a comparable basis, a marked improvement on the 3% fall for the year as a whole. The top line was propped up by a 16% increase in revenues from mobile equipment sales.

Orange reported that it increased capital spending on 4G networks by 43% to 408 million euros in 2014, while stepping up spending on fibre and VDSL fixed-line networks by 40% to 436 million euros. source: Orange presentation

Twitter's Revenue Almost Doubles

source: Twitter presentation

Vodafone Prepares to Bounce Back

Vodafone said its service revenue declined 0.4% year-on-year to 9.8 billion British pounds (14.9 billion US dollars) on an organic basis in the quarter ending December 31st. A 3% decline in Europe was partially offset by a 6% increase in its operations in Asia, the Middle East, Africa and Pacific.  In Italy, service revenue fell 7% and in Spain 9%, but rose 15% in India and 12% in Turkey.

Vittorio Colao, CEO, said: “We have achieved another quarter of improving revenue trends in most of our major markets. Growth in India has accelerated again, driven by data. In Europe, improved commercial execution in both mobile and fixed over the last few quarters, combined with strong data demand and a more stable pricing environment, is supporting the steady recovery in the top line. Our recent cable acquisitions continue to perform well, with good progress made on integration."

Vodafone reported a 39% year-on-year increase in capital expenditure to 2.1 billion pounds in the quarter. It now claims 4G coverage of 65% of the population in the European countries where it operates. source: Vodafone statement

Lenovo Starts a New Race

Boosted by acquisitions, Lenovo reported a 31% year-on-year increase in revenues in the quarter ending December 31st to 14.1 billion US dollars. It claims to lead the global PC market, with 20% share, and be number three in the mobile phone market behind Samsung and Apple.

“This quarter, we are at the starting line of a new race, but the results show that we have the right strategy, we made the right acquisitions and we executed well globally, so I am confident we are ready to win,” said Yuanqing Yang, chairman and CEO of Lenovo. “Our core PC business maintained its leading position and further improved profitability. The two newly acquired businesses are achieving great momentum in their first quarter of integration. They are definitely becoming our growth engines. Motorola is already a global strength: for the first time it sold more than 10 million units in the quarter and it is now re-entering the China market. Meanwhile, we have a strong start with the System x integration.” source: Lenovo presentation

AT&T Promises More Growth Ahead

AT&T said revenues rose 5% year-on-year in the fourth quarter to 34.4 billion US dollars, driven by a 8% uplift in wireless revenues.  Although wireless service revenues actually fell 4%, as AT&T's Mobile Share Value plan proved popular, AT&T said equipment revenues leapt 72% "as more customers chose equipment installment plans versus subsidized devices."

AT&T said it continues to "reposition the customer experience with attractive Mobile Share Value pricing for customers who choose to transition from the traditional device subsidy model."

For 2015, AT&T forecast continued revenue growth, on a standalone basis, excluding its Mexico and DIRECTV acquisitions. AT&T expects capital expenditures to be about 18 billion dollars in 2015, down from 21.4 billion dollars in 2014. source: AT&T statement