Telefónica adds 437,000 pay TV subscribers in 4Q 2014

MADRID — Telefónica presented today FY 2014 results.

Pay TV accesses totalled 5.1 million and posted growth acceleration for the seventh consecutive quarter to 48% in organic terms on the back of 437 thousand net additions in the quarter, 2.7 times the figure in October-December 2013. Thus, in organic terms, net additions for the year 2014 totalled 1.6 million (more than 6 times higher year-on-year). Noteworthy in the fourth quarter were Telefónica España, with 305 thousand net additions, and Telefónica Hispanoamérica, with quarter-on-quarter acceleration in net additions (1.8 times higher).

Telefónica España

Pay TV accesses reached 1.9 million (almost tripling compared with December 2013), reflecting the success of “Movistar TV” as a key differentiation lever of the convergent offer, with quality content and innovative features. Net additions in the quarter totalled 305 thousand accesses (1.2 million in the year), with a standout performance from churn (1.0%; -1.9 percentage points year-on-year), which is at an historic low.

Telefônica Brasil

Pay TV accesses grew 20% year-on-year to reach 771 thousand, after posting net additions of 43 thousand accesses in the quarter (131 thousand in the year). Accesses connected with fibre through IPTV technology − with higher ARPU compared with the average of the pay TV accesses – reached 95 thousand accesses, double 2013 base (net additions of 17 thousand in the last quarter).

In the fourth quarter Telefonica launched a TV Everywhere service for Vivo fibre customers in Brazil, offering TV content across multiple devices (mobile, PC or tablet).

Telefónica Hispanoamérica

Pay TV accesses grew by 14% year-on-year to 2.4 million with solid net additions of 89 thousand accesses in the fourth quarter (298 thousand accesses in the full year).

Telefónica Chile

Pay TV accesses (601 thousand) advanced by 19% year-on-year, with net additions of 98 thousand accesses in January-December and 21 thousand in October-December as a result of a differential offer leveraged on the platform and high definition broadcasting (80 HD channels are already available).

Telefónica Perú

Pay TV accesses reached 948 thousand at the end of the year (+6% year-on-year), as the positive net additions trend of the last two quarters was solidified in October-December (+59 thousand accesses). This improvement is the result of the higher volume of gross additions (x2 year-on-year) and the positive performance of churn (-0.2 percentage points year-on-year).

Telefónica Colombia

Pay TV accesses stood at 416 thousand, 20% more than in 2013, with net additions of 15 thousand accesses, 68 thousand in the year, underpinned by the launch of high definition channels and by the improvement of the interactivity in the platform.

Telefónica Venezuela and Central America

Pay TV accesses in Venezuela grew by 21% year-on-year to reach 467 thousand at the end of 2014 despite a net loss of 6 thousand accesses in the quarter (+81 thousand in the year) due to the low availability of decoders, which resulted in a significant decline in gross additions levels.

Pay TV accesses (000s)

                                                                             Growth
                      3Q 2013  4Q 2013  1Q 2014  2Q 2014  3Q 2014  4Q 2014  Y-o-Y %
                      -------  -------  -------  -------  -------  -------  -------
Spain(1)                609.3    672.7    730.3  1,209.5  1,579.4  1,884.7     n.m.

Germany(2)               41.5        -        -        -        -        -        -

(Czech Republic(3)      147.6    156.0        -        -        -        -       -)

Brazil                  587.7    640.1    644.8    687.8    727.6    770.6     20.4

Hispanoamérica        2,055.1  2,133.5  2,192.0  2,294.6  2,343.0  2,431.9     14.0
 Chile                  480.5    503.2    527.1    559.9    580.3    601.3     19.5
 Colombia               332.1    347.6    363.8    384.1    400.8    416.0     19.7
 Peru                   904.8    897.1    885.7    887.3    889.1    948.0      5.7
 Venezuela and
  Central America(4)    337.6    385.6    415.3    463.2    472.8    466.6     21.0
                      -------  -------  -------  -------  -------  -------  -------
Total                 3,441.2  3,602.2  3,567.1  4,191.9  4,650.0  5,087.2     41.2
 ex. Czech Rep.       3,293.6  3,446.3  3,567.1  4,191.9  4,650.0  5,087.2     47.6

1. Since the second quarter of 2014, Pay TV accesses include 131 thousand “TV Mini” customers in Spain.
2. From the fourth quarter of 2013, the company stopped offering a TV service.
3. Sold to PPF Group N.V.
4. Central America includes Guatemala, Panamá, El Salvador, Nicaragua and Costa Rica.