Moviles's reign in Spain

12 May 2003

The Spanish incumbent’s mobile arm is holding share in the domestic market that accounts for most of its value, and growing margins too. It is living up to the expectations reflected in its share price. But they are high, and so is the price.

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Telefonica Moviles has announced an 8.4% increase in ebitda in the first quarter of 2003, despite the strong negative impact from the devaluation of South American currencies, reflected in a 5.8% fall in operating revenues. The mobile arm of Spanish incumbent Telefonica, which owns over 92% of its shares, Moviles derives 75% of its revenues from its home country. They grew 1.9% in the quarter, reflecting falling handset sales and rising service revenues. Average revenue per user rose in March for the first time after a sustained fall, as rising usage offset cuts in call termination charges. Ebitda in Spain was up 12.8%, and the ebitda margin increased to 55.1%, an increase of over 5%.

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