Telefónica sees pay TV fall and OTT rise as it commits to full fibre coverage

Telefónica has posted Q2 numbers that saw its global pay TV base decline by 6% year-on-year to 8.243 million. The telco did however grow its OTT TV base, up 26% year-on-year to 1.4 million.

Telefónica has meanwhile committed to 100% fibre network coverage of Spain by 2025.The commitment was made as part of a new ‘Digital Deal’ for the post-COVID-19 world that also promises that the company will ‘lead the implementation of 5G’ in the country.

Video revenues fell by 2.1% to €1.421 billion, contributing to an overall fall in digital services revenues of 0.6% to €1.687 billion. Overall service revenue was up by 5% in organic terms, boosted by broadband connectivity sales, offset by the impact of COVID-19 on roaming and enterprise revenues.

In Spain, Telefónica’s pay TV base was down 1.3% to 4.054 million, but rose quarter-on-quarter by 22,000, boosted by new low-cost offering Movistar+ Lite and the return of football to the pay TV service.

Fibre broadband access lines were up 133,000 to 6.8 million, representing 74% of the company’s retail broadband base and 63% of the total wholesale broadband base.

On the other side of the Atlantic, Brazilian pay TV numbers including DTH were down 13% year-on-year to 1.27 million, but IPTV numbers were up by 24.3% to 805,300, the highest quarterly rise since 2018.

Similarly, pay TV numbers in Spanish-speaking Latin America were down 9.1% to 2.89 million, but IPTV numbers rose by 106.5% to 424,000, boosted by the take up of fibre offers.

The Spanish telco has meanwhile also agreed the sale of its Costa Rican operation to Liberty Latin America for US$500 million (€425 million), three months after rival buyer Millicom pulled out of an agreed deal, leading to Telefónica launching legal action against the company for breach of contract.

In May, Telefónica agreed to fold its UK mobile arm O2 into a new JV with Liberty Global-owned Virgin Media in a deal that is expected to generate £5.2 billion in proceeds for the Spanish telco.

Telefónica posted overall revenues of €10.34 billion for Q2, down 3.8%, and OIBDA of €3.315 billion, down 6.6%.