Fiber push continues for Telefónica as capex hits nearly €9B
Iain Morris, International Editor, 2/20/2020
Telefónica said capital expenditure was up more than 8% last year as it continued to pump money into the rollout of higher-speed fiber networks in core markets.
The Spanish operator spent around €8.8 billion ($9.5 billion) on capex internationally. While that included some €1.5 billion ($1.6 billion) on spectrum licenses, the company said in a financial report published today that capex rose 4% organically as it continued to focus on "accelerating excellent connectivity."
"We continue to invest in next generation networks, cementing our leadership in fibre networks in both Europe and Latin America," said José María Álvarez-Pallete, Telefónica's chairman and CEO, in a statement. "Thanks to years of investment, our capex-to-sales ratio peak is behind us."
Telefónica today reported sales of about €48.4 billion ($52.2 billion) and underlying profits of €15.1 billion ($16.3 billion) for 2019 across its international operations.
Networks based on fiber now cover 127.8 million premises worldwide and are helping to boost efficiency by allowing Telefónica to switch off its older copper-based networks and supporting platforms, said the operator in its earnings report. The fiber rollout will also support its 5G plans, it added.
In Spain, its domestic market, Telefónica's fiber-to-the-home network now passes 23.1 million premises, while in Brazil the same technology passes some 21.1 million homes. The operator also boasts 11.4 homes passed with fiber-based and cable networks across other Latin American markets.
The company has been under intense pressure to invest in higher-speed broadband networks in Spain, where it faces competition in the fiber market from Orange and Vodafone.
Telefónica's share price fell 5% in Spain this morning after investors were disappointed by financial results for 2019. The company has been slashing jobs to boost profits, but restructuring charges tore into profitability. (See Telefónica fails to stop rot after axing 4,500 jobs last year.)
— Iain Morris, International Editor, Light Reading
The UK is bustling with companies eager to build the next generation of broadband networks in what looks like a potentially nasty development for BT.
The wholesale operator's CEO claims speed tests that rank Australia as a broadband laggard are flawed and comes up with an alternative.
Inexio and Deutsche Glasfaser could attract interest from infrastructure investors or other broadband players, reports Reuters.
There is no point in building an all-fiber network if it remains empty, says BT. And yet much of it still is.
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