Telefonica pay TV subscribers down 25k in 3Q 2016

MADRID — Telefónica’s net profit stands at 2,225 million euros after the first nine months of the current year, having gained a significant improvement in the Company’s net income in the third quarter of the current year (+38,5%, 983 million euros between July and September).

Digital Services

Video revenues in the quarter (723 million euros) grew year-on-year by 9.9% (+13.3% in the first nine months of the year), driven by the growth of pay TV accesses to 8.4 million at September (4.4 million satellite TV accesses).

The focus on improving the value of the video offering is ongoing and thus, in the quarter, new services were launched in Spain, which improve customer experience: Home Zone (ability to watch TV on three devices simultaneously in HD quality) and Recommendations. In Latin America, an agreement was signed with Vivendi to offer exclusive premium content to mobile customers, incorporating two new services: WatchMusic, a music video platform, and STUDIO+, the first international app for short series.

Telefónica España

Pay TV accesses grew 4% year-on-year and stood at 3.7 million, including 678 thousand DTS satellite accesses by satellite. Net additions for July-September (-44 thousand) was the result of the loss of satellite customers (-54 thousand) not offset by net additions of IPTV customers (+10 thousand), in a quarter affected by the change in tariffs, lower volume of gross additions due to the seasonality of the period and the start of the football season (with greater promotional activity in the market). Meanwhile, churn for the quarter decreased 1.1 percentage points year-on-year to 1.8%.

Telefónica Brasil

Pay TV accesses (1.8 million) decreased by 4% vs. September 2015 due to the macro environment and the more restrictive commercial activity based on capturing value. Net additions in the quarter increased to 1 thousand accesses (-26 thousand access in January-September), highlighting the greater contribution of IPTV accesses (+18 thousand in the quarter, +43 thousand in the first nine months). The greater weight of IPTV access and high value plans in DTH drove solid ARPU trend (+12.0% year-on-year in July-September vs. +13.1% in the first nine months).

Telefónica Hispanoamérica

Pay TV accesses (2.9 million, +7% year-on-year) continued to post strong year-on-year growth rates across all markets thanks to the differentiated content and technological solutions. Thus, quarterly net additions increased to 18 thousand accesses (111 thousand in the first nine months) with the reduction in churn in Chile and Peru standing out (-0.3 percentage points and -0.2 percentage points year-on-year, respectively).

Telefónica Chile

Pay TV accesses stood at 661 thousand (+3% year-on-year) with quarterly net additions of 5 thousand accesses (+17 thousand accesses in January-September) leveraged in a differential offer and the broadcast of high-definition channels.

Telefónica Perú

Pay TV accesses stood at 1.3 million customers at September (+10% year-on-year) and reached quarterly net additions of 11 thousand accesses (+60 thousand in the first nine months) supported both, by owned production and exclusive content and by a higher number of channels in high definition and the greater platform functionality.

Telefónica Colombia

Pay TV accesses maintained positive net additions (11 thousand accesses), due to the increase in high definition channels (5 channels included in the offering) and the improvement in content. Increased quality of the base benefited ARPU, which accelerated its year-on-year growth to 14.7% (+14.6% in January-September).

Pay TV accesses (000s)

                                                                                     Growth   Growth
                      1Q 2015  2Q 2015  3Q 2015  4Q 2015  1Q 2016  2Q 2016  3Q 2016   Q-o-Q  Y-o-Y %
                      -------  -------  -------  -------  -------  -------  -------  ------  -------
Spain*                2,139.5  3,595.7  3,583.4  3,671.5  3,727.8  3,755.0  3,711.4   -43.6     3.6%
Brazil**                790.9  1,785.9  1,829.2  1,787.9  1,786.7  1,761.4  1,762.2     0.8    -3.7%
Hispanoamerica        2,536.2  2,648.6  2,741.7  2,812.2  2,850.9  2,905.6  2,923.1    17.5     6.6%
 Chile                  616.2    634.3    641.0    644.7    645.6    656.8    661.3     4.5     3.2%
 Peru                 1,014.5  1,090.1  1,147.7  1,200.8  1,229.6  1,250.3  1,261.3    11.0     9.9%
 Colombia               429.4    444.2    471.0    488.6    497.4    520.4    531.7    11.3    12.9%
 Venezuela              476.1    480.0    482.1    478.1    478.2    478.1    468.7    -9.4    -2.8%
                      -------  -------  -------  -------  -------  -------  -------  ------  -------
Total                 5,466.5  8,030.3  8,154.3  8,271.6  8,365.4  8,422.0  8,396.7   -25.3     3.0%

* From the second quarter of 2015, Pay TV accesses include DTS.
** GVT accesses are consolidated from 1 May 2015.