Telefonica Europe pay TV subscribers continue to decline

MADRID — Telefónica (Madrid and NYSE: TEF) has released its first quarter (January to March) 2013 results.

TELEFÓNICA LATINOAMÉRICA

Pay TV accesses reached 2.5 million, up 7% year-on-year with net additions of 25 thousand accesses in the quarter.

Brazil

Pay TV accesses stood at 566 thousand (-17% year-on-year), impacted by the MMDS technology accesses loss associated with the future return of the licence. The Company is working on increasing the scope of its new IPTV and OTT “Vivo Play” with multiple-device access launched in the final quarter of 2012.

Chile

Pay TV accesses stood at 442 thousand, up 10% year-on-year, after reaching net additions of 18 thousand accesses in the quarter, the highest number in the last two years, with a strong churn reduction (-0.8 percentage points).

Peru

Pay TV accesses stood at 908 thousand at the end of March, a year-on-year increase of 10% with net additions of 6 thousand accesses in the quarter.

Colombia

Pay TV accesses totalled 299 thousand, up 17% year-on-year, with net additions of 14 thousand accesses in the quarter thanks to the focus of the Company on reducing churn (-1.3 percentage points year-on-year) and the marketing of the stand-alone product since July 2012, which has boosted gross additions as coverage has increased.

Venezuela

Pay TV accesses virtually doubled year-on-year to 238 thousand accesses.

TELEFÓNICA EUROPE

Telefónica España

Pay TV accesses performance remain impacted by the price increase of higher VAT applied to the service since September 2012 and the adverse macroeconomic environment, which translated in a quarterly net loss (-51 thousand accesses). However, the loss of accesses progressively eased along the quarter and in April an “Imagenio Familiar” promotion was launched for 10 euros per month (instead of 29.9 euros) until 31 August to foster new customer acquisition.

Telefónica Czech Republic

Pay TV customers rose 2% year-on-year and totalled 141 thousand at the end of the quarter.

Pay TV accesses (000s)

                 1Q 2012  2Q 2012  3Q 2012  4Q 2012  1Q 2013  YoY Chg
                 -------  -------  -------  -------  -------  -------
Latin America    2,294.3  2,319.6  2,353.6  2,426.8  2,452.2     6.9%
 Brazil            682.8    650.5    619.3    601.2    565.7   -17.1%
 Chile             400.6    407.9    408.1    424.0    441.8    10.3%
 Peru              828.0    856.5    885.0    901.6    907.8     9.6%
 Colombia          255.0    257.7    271.8    284.8    299.1    17.3%
 Venezuela         127.9    147.1    169.5    215.3    237.9    86.0%

Europe           1,029.7  1,004.4    964.1    909.3    852.2   -17.2%
 Spain             812.9    792.4    759.6    710.7    659.9   -18.8%
 Germany            78.7     72.7     64.8     57.2     51.3   -34.8%
 Czech Republic    138.1    139.2    139.7    141.4    140.9     2.0%

Total            3,324.0  3,324.0  3,317.7  3,336.2  3,304.4    -0.6%