UPDATE 3-Spanish market keeps the brakes on Telefonica's turnaround

jueves 14 de mayo de 2015 10:19 GYT

* First-quarter revenue up 12.6 pct, core profit up 7.7 pct

* Germany, Brazil, Latam grow but Spain still contracting

* Reiterates guidance for 2015, but shares fall (Adds comments by COO, further details on Spanish business)

By Julien Toyer and Andrés González

MADRID, May 14 (Reuters) - Spanish telecoms group Telefonica posted higher first-quarter sales and core profits on Thursday, despite a disappointing performance in its home market, where a rise in customers has yet to deliver revenue growth.

The company said it has now entered a new phase of growth following a six-year slide in revenue and profit that was caused by the deep economic crisis in Europe and the subsequent restructuring of its business in an effort to reduce its debt.

Having recently bought rivals in Germany and Brazil and agreed the sale of its British unit, Telefonica is now focused on fixing its domestic business, which has shrunk by 40 percent since 2009 and today accounts for just a quarter of revenues.

Telefonica has raised prices on most of its phone, internet and television packages in Spain this year in a move to meet its commitment to return to sales growth in the country this year.

It hopes softer price competition and its heavy investment in high-speed networks and premium TV content will keep existing customers and attract new ones, with the price increases expected to reflect on the financial results from mid-2015 onwards.   Continuación...