Performance

Performance highlights for the third quarter ended 30 September 2008

Access our full set of third quarter results for the period ended 30 September 2008.

• The Group continues to perform strongly in a challenging environment, with a limited impact so far from the wider economy. For the first nine months of the year Telefónica Europe delivered like for like revenue growth of 5.9%, with 3.4% growth in operating income before depreciation and amortization (OIBDA¹), fully in line with full year guidance.
• Total mobile customer base 40.4 million (+8.6% year on year) with 14.5% growth in the contract customer base, and 1.5 million contract customers added in the first 9 months; SIM only tariffs continue to be popular, with a base of over 3 million customers across the group at the end of September; iPhone 3G a huge success, with the UK business selling twice as many in half the time compared to the original iPhone; additional products that address customer needs in the current economic environment will be launched in the coming quarters.
• Telefónica O2 UK again outperformed the market, growing revenue 8.7% and OIBDA 5.5% in the third quarter on a like for like basis, reflecting strong customer growth with a record 278 thousand contract net additions in the quarter, driven by market leading levels of churn and the strength of propositions such as Simplicity and iPhone 3G. The small business segment also delivered a record quarter, benefiting from a new regional structure and sales of combined voice and data packages;
• Telefónica O2 Germany added 402k mobile customers in the quarter, with an improved mix of higher value customers on contract. The migration program, offering existing customers new, better value tariffs, now 85% complete. The trend of quarter on quarter growth in both revenues and OIBDA continued, growing 2.4% and 7.6% respectively. Year on year, revenue grew 0.7% while OIBDA was 2.4% lower reflecting the focus on acquiring higher value customers;
• Telefónica O2 Czech Republic grew revenues by 5.1% in the quarter. The mobile business in the Czech Republic recorded 2.2% service revenue growth in the third quarter, while in the fixed business, the trend of sequential improvements in fixed line losses continued (45k in Q3 2008 vs. 58k in Q2 and 74k in Q1);
• Telefónica O2 Ireland posted an improved performance on customer growth, adding 26 thousand customers in the quarter, with a record 38 thousand on contract, driven by the new O2 Clear tariffs and mobile broadband.
• Non-SMS data revenue €648 million year to date, +38.7% year on year (constant currency);
• 2008 guidance maintained: revenue growth 4% - 7%, OIBDA growth 2% – 6%
  

¹ Assuming constant exchange rates and excluding the consolidation of Airwave in the first quarter of 2007. Capital gain from the sale of Airwave is also excluded, as well as gains related to the real estate sale in the Czech Republic, restructuring and similar charges and the result of the application of provisions made in respect of potential contingencies deriving from the past disposal of shareholdings, once these risks had dissipated or had not materialized.