What Supported TEF’s 4Q15 Organic Revenue Growth in Brazil?



Telefónica’s revenue in Brazil in 4Q15

Now, let’s take a look at the 4Q15 performance of Telefónica (TEF) in Brazil (EWZ). Overall, Telefónica’s revenue in this geography represented ~21.8% of its total revenue during the quarter.

On an organic level, Telefónica Brasil’s revenue rose ~3.4% YoY (year-over-year) and was ~2.6 billion euros in 4Q15. The growth in the company’s fixed services component outpaced its overall organic revenue growth in the market during the quarter.

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Telefónica’s fixed services in Brazil in 4Q15

YoY and organically, Telefónica’s fixed services revenue in Brazil rose ~3.5% to ~1.1 billion euros in 4Q15. The broadband and new services component’s revenue grew organically by ~10.9% YoY to reach ~0.5 billion euros during the quarter.

Meanwhile, organically, Telefónica’s fixed voice and access revenue fell by ~2.3% YoY to ~0.55 billion euros in this market in 4Q15.

Solid growth in pay-TV connections

Organically, Telefónica’s fixed telephony connections in Brazil fell by ~2% YoY to ~14.7 million in 4Q15. Meanwhile, Telefónica’s fixed broadband connections rose organically by ~4% YoY to reach ~7.1 million during the quarter in this market.

According to the company, its pay TV connections increased organically by ~10% YoY to ~1.8 million in Brazil in 4Q15. As per the company, it was able to absorb the entire customer growth of the pay-TV space in this key market in 2015.

Instead of direct exposure to TEF, you can take a diversified exposure to the company and some of its peers by investing in the iShares Global Telecom ETF (IXP). The ETF had ~4.1% of its holdings in Telefónica at the end of December 2015. It held a combined total of ~15.7% in Vodafone (VOD), Deutsche Telekom (DTEGY), and Orange (ORAN) as of the same date.


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