Telefónica Heralds New Growth Cycle

Telefónica reported year-on-year organic growth of 4.4% in its revenues in the second quarter of 2015 to 11.88 billion euros, compared with 3.3% in the first quarter. The group's top line was boosted by 10% revenue growth in T. Hispanoamérica (Spanish speaking Latin America) and 5% in Brazil

The Madrid-based telco said that a rise in the number of customers paying for additional data beyond their tariff plan had contributed one percentage point to organic growth in the quarter. It added that 30% of its customers are using up their bundle of data, of which more than 40% pay for additional data.

César Alierta, Executive Chairman, said: "Particularly noteworthy, for example, is the significant year-on-year growth of 66% in video traffic, 52% in mobile data traffic and the 60% higher data usage of an LTE customer vs. a 3G customer. The strength of the evolution of the business in the first half of the year, coupled with our positioning in order to capture growth opportunities in the coming quarters, have led us to revise our objectives upwards for 2015.” source: Telefónica statement

Orange Almost Back to Stability

Orange reported its revenues fell 0.2% year-on-year on an organic basis in the second quarter of 2015, a marked improvement on the 0.9% fall in the previous quarter.  In its home market, France, revenues were down 0.8% year-on-year.

Orange Group CEO Stéphane Richard said: “We are particularly pleased with these results which mark a return to revenue growth in the second quarter, excluding regulation, for the first time since 2011... We delivered a very good commercial performance especially in France, Belgium, Romania and throughout the Africa and Middle East region. .. we now have more than 12 million 4G customers in Europe and have doubled our level of acquisition of fixed broadband customers in France thanks to fibre." source: Orange statement

Revenue Bounces Up for Baidu

China's leading search service Baidu reported a 38% year-on-year increase in revenues for the second quarter of 2015 to 16.6 billion Chinese yuan (2.67 billion US dollars).  In the first quarter, revenues were up 34% year-on-year.

Baidu reported 590,000 active marketing customers in the second quarter, an increase of 21% year-on-year, while revenue per customer for the quarter rose 13% to 27,400 yuan (4,419 dollars). Baidu said it had 304 million active mobile map users in June 2015, an increase of 48% year-on-year.  source: Baidu statement

Emerging Markets Bolster Vodafone

Vodafone reported a 0.8% year-on-year increase in service revenue to 9.2 billion UK pounds on an organic basis in the first quarter, as a 6.1% increase in Africa, the Middle East and Asia Pacific offset a 1.5% decline in Europe.  Group revenue rose 3.3% on an organic basis to 10.1 billion UK pounds (15.7 billion US dollars), boosted by strong equipment sales.

Vodafone said: "In Europe, organic service revenue has continued to recover, declining 1.5% (Q4: -2.6%), supported by more stable pricing environments in many markets and an improved commercial performance, as well as a positive impact from the inclusion of KDG and Ono in organic growth rates." source: Vodafone statement

Sales of Handsets Shore Up AT&T

AT&T reported year-on-year revenue growth of 1.4% for the second quarter of 2015 to 33 billion US dollars.  Wireless revenues rose by 2.1%, boosted by 14% growth in equipment revenues.

AT&T reported 2.1 million additional connections in its wireless business, including 410,000 postpaid connections, 331,000 prepaid connections and 1 million connected cars. source: AT&T presentation

Qualcomm Warns of Further Weakness

Qualcomm said its revenues in the quarter ending June 28, 2015, fell 14% year-on-year to 5.8 billion US dollars. The chip maker said that Qualcomm licensees shipped 60.4 billion dollars of devices in the quarter, below its original forecast of between 61 billion and 67 billion dollars.

It warned that sales in the current quarter will be between 4.7 billion and 5.7 billion dollars, compared with 6.7 billion dollars in the same period in 2014. That would represent a year-on-year decline of up to 30%. source: Qualcomm presentation

Verizon Outgrows AT&T (Again)

Verizon reported year-on-year revenue growth of 2.4% for the second quarter of 2015 to 32.2 billion US dollars, marginally behind main rival AT&T (33 billion dollars). Verizon said wireless service revenue grew 2.3%, as connections rose 4.7%. Wireline revenue was down 2.2%. source: Verizon presentation

Apple Flags Forthcoming Slowdown

Apple forecast that its revenue in the current quarter (ending September 27th) will be between 49 billion and 51 billion US dollars, up from 42.1 billion dollars a year ago. That would represent an increase of between 16% and 21%. In the quarter ending June 27th, sales were up 33% year-on-year to 49.6 billion dollars, fuelled by a 59% rise in iPhone revenues. However, iPad revenues were down 23% year-on-year.

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.” source: Apple statement

Huawei Enjoys Stronger Quarter than Ericsson

Ericsson said its sales, adjusted for comparable units and currency, in the second quarter fell 6% year-on-year to 60.7 billion Swedish krona (7.1 billion US dollars), hit by less capacity business in North America. Ericsson added that its reported IPR revenues were slightly down year-on-year despite a positive currency effect... primarily due to an ongoing dispute with a major customer. source: Ericsson presentation

Meanwhile, Huawei reported a 30% year-on-year increase in revenues to 175.9 billion Chinese yuan (20.4 billion US dollars) for the first six months of 2015.  "Investment continued to pour into 4G network construction in China," noted Huawei's Chief Financial Officer Meng Wanzhou.  "In addition, the growth in global data traffic drives investment in network capacity expansion, while carriers' digital transformation pushes up investment in the ICT industry. These factors helped us maintain steady growth in the carrier business." source: Huawei statement

Google Perks Up Slightly

Google reported an 18% year-on-year increase in revenues for the second quarter (in constant currencies) to 17.73 billion US dollars, slightly better than the 17% achieved in the first quarter. The number of paid clicks on adverts brokered by Google rose 18% year-on-year, but the average cost of these clicks to Google's customers fell 11%.

"Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising”, said Ruth Porat, CFO of Google.  Google's "other revenues", generated primarily from sales through its Play app store, rose 17% year-on-year on a reported basis, despite adverse currency movements. source: Google statement

My report on Google's Big, Big data Battle for STL Partners is available here.

Netflix Forecasts 30% Growth

Netflix forecast that it will generate revenue of 1.59 billion US dollars in the third quarter, which would be a year-on-year increase of more than 30%. In the second quarter, revenues rose 29% to 1.48 billion dollars.

"We added a Q2 record 3.3 million new streaming members, compared to 1.7 million in the previous year quarter," Netflix said. "We are making great progress shifting to exclusive content and expanding our original content, which differentiates our service, drives enjoyment for existing members and helps motivate consumers to join Netflix."

"We compete with linear TV, PPV, video piracy, other Internet networks, video gaming and many other sources of entertainment. The recent Sandvine results from North America show that, looking at just the Internet networks segment, we continue to improve faster than others. Note that this data measures peak megabits, not peak viewing hours, so YouTube, for example, with more modest average video quality, is underrepresented in terms of hours." source: Netflix statement

Global Device Market Shrinks

Worldwide shipments of devices (PCs, tablets, ultramobiles and mobile phones) will reach 2.5 billion units in 2015, a 1.5% increase from 2014 and lower than the previous quarter's forecast of 2.8% growth, according to research firm Gartner. "This was partly due to a continued slowdown in PC purchases in Western Europe, Russia and Japan in particular, largely due to price increases resulting from local currency devaluation against the dollar," said Ranjit Atwal, research director at Gartner. 

End-user spending on devices will total 606 billion US dollars in 2015 and will show, for the first time since 2010, a decline in current U.S. dollars, Gartner added. source: Gartner statement

Separately, Samsung Electronics estimated that its revenue in the second quarter was down about 8% year-on-year to 48 trillion Korean won (43 billion US dollars): source: Mobile World Live article.

Xiaomi Reports 33% Growth

Much-hyped and unusually innovative Chinese handset vendor Xiaomi tweeted that it sold 34.7 million smartphones in the first half of 2015, up 33% year-on-year. By way of comparison, Apple sold more than 61 million iPhones in the first quarter of 2015. source: Xiaomi tweet