Telefónica pay TV subscribers stable over 2012 at 3.3 million

MADRID — Telefónica (Madrid and NYSE: TEF) has released its fourth quarter and full year (January to December) 2012 results.

Telefónica finished 2012 with 3.34 million pay TV subscribers compared with 3.31 million at the end of 2011. Losses in Europe and Brazil were offset by growth in subscriber numbers elsewhere in Latin America.

During the fourth quarter of 2012, Telefónica Digital and Microsoft signed a strategic agreement for the creation of a Global Video Platform, that offers television services both in managed networks (IPTV) and non-managed networks (over-the-top). During the quarter the service was launched in Brazil and Chile.

TELEFÓNICA LATINOAMÉRICA

Pay TV accesses reached 2.4 million, growing by 7% year-on-year, and with net additions of 169 thousand accesses in the year, with an improvement in the quarter (73 thousand in the fourth quarter; 34 thousand in the third quarter; 25 thousand in the second quarter).

Brazil

In television, the fourth-quarter highlights were the launch in October of the new platform for IPTV service and the introduction of the OTT “Vivo Play” service in December.

Pay TV accesses stood at 601 thousand (-14% year-on-year), impacted by the MMDS technology accesses loss associated with the future return of the licence. As a result of the Company’s strategic focus on the commercial repositioning of this service, in October the new IPTV service via a new platform for high-speed fibre technology was launched while the OTT “Vivo Play” service with multi-device access was launched on 20 December.

Chile

The new IPTV platform for TV service was launched in the fourth quarter.

Pay TV accesses stood at 424 thousand, growing by 8% year-on-year, with net additions of 16 thousand accesses in the fourth quarter (+17 thousand at the end of September 2012) after reducing churn in the last quarter of the year.

Peru

Pay TV accesses stood at 902 thousand at the end of December, a year-on-year increase of 13% and net additions of 103 thousand in the year (+17 thousand accesses in the fourth quarter).

Colombia

Pay TV accesses totalled 285 thousand, up 12% year-on-year, with net additions of 13 thousand accesses in the quarter (30 thousand in the year), as a consequence of the Company’s focus on repositioning its offer as a differential aspect of its bundling strategy. Churn also showed a strong reduction of 0.4 percentage points in the year.

TELEFÓNICA EUROPE

Pay TV accesses fell by 14% year-on-year to 0.9 million at the end of 2012.

Telefónica España

Pay TV accesses stood at 711 thousand at the end of December 2012 (-15% year-on-year). Performance in the quarter (-49 thousand accesses) was affected by the review of prices and the VAT increase applied to the service since September. Nonetheless, gross additions surpassed the third quarter figure and remained stable over the year. In December 2012,
“Movistar Imagenio” strengthened and simplified its choices for lovers of film and TV series (“Ocio”, €12), sport (“Deportes”, € 20) and a more wide-ranging offering (“Familiar” €29.90), with the customer able to select any of these three options when signing up for “Movistar Fusión TV”.

Telefónica Czech Republic

Pay TV customers increased 4% year-on-year and totalled 141 thousand at the end of 2012, a sustained growth throughout the year.

Pay TV accesses (000s)

                 4Q 2011  1Q 2012  2Q 2012  3Q 2012  4Q 2012   % Chg
                 -------  -------  -------  -------  -------  ------
Latin America    2,257.7  2,294.3  2,319.6  2,353.6  2,426.8     7.5
 Brazil            698.6    682.8    650.5    619.3    601.2  (13.9)
 Chile             390.8    400.6    407.9    408.1    424.0     8.5
 Peru              799.0    828.0    856.5    885.0    901.6    12.8
 Colombia          255.0    255.0    257.7    271.8    284.8    11.7
 Venezuela         114.3    127.9    147.1    169.5    215.3    88.3

Europe           1,052.2  1,029.7  1,004.4    964.1    909.3  (13.6)
 Spain             833.2    812.9    792.4    759.6    710.7  (14.7)
 Germany            83.3     78.7     72.7     64.8     57.2  (31.3)
 Czech Republic    135.6    138.1    139.2    139.7    141.4     4.3

Total            3,309.9  3,324.0  3,324.0  3,317.7  3,336.2     0.8