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Telefonica feels pinch from end to roaming charges

Spanish telecoms giant Telefonica said Thursday that its third-quarter profits were hit by exchange rate fluctuations and the abolition of roaming charges in the EU.

Telefonica said in a statement that its net profit fell by 14.7 percent to 839 million euros ($991 million) in the period from July to September.

That fell short of analysts’ expectations for third-quarter net profit of 958 million euros.

Chief executive Jose Maria Alvarez-Pallete pointed to the “negative impact of the new regulation in Europe,” in reference to the decision by Brussels in June to abolish cross-border roaming charges for mobile phone users in the 28-nation bloc.

Group revenues were down 2.5 percent at 12.75 billion euros in the three-month period, with the roaming charge effect accounting for a reduction of 1.3 percentage points, Telefonica said.

Excluding exchange rate fluctuations, third-quarter revenues would have risen by four percent, it calculated.

“Third-quarter results reflected the solid execution of the main strategic priorities set for the year. Thus, our organic growth is consistent and sustainable,” said CEO Alvarez-Pallete.

Looking ahead, the group, which owns the O2 and Movistar brands, said it was sticking to its target for sales growth of “up to 1.5 percent.”