UPDATE 3-Spain's Telefonica sees recovery momentum despite profit fall

miércoles 12 de noviembre de 2014 11:04 GYT
 

* Nine-month net profit down 9.4 pct

* Bundled packages key to turnaround prospects

* Strategy squeezes margins (Adds debt management detail, updates shares)

By Julien Toyer and Andrés González

MADRID, Nov 12 (Reuters) - Spain's Telefonica pointed to rising demand for its mobile, broadband and pay-TV deals as evidence of a turnaround from its three-year slump as it posted falling revenue and profit in the first nine months of the year.

The trend echoed that at British and Dutch rivals Vodafone and KPN, which have started to benefit from investments in faster networks, though Telefonica's trading improvement may need a few more months to bolster the bottom line.

Telefonica, which has lost more than a third of its revenue and core profit in Spain as cash-strapped consumers reduce telecoms spending, is betting on the take-up of bundled packages combining mobile and fixed-line phones, high-speed Internet and TV and on its heavy investment in fibre-optic networks.

The strategy comes at a price, however. Margins in Spain, which contributes 42 percent of revenue and 30 percent of operating income, have continued to fall, slipping 2.7 basis points to 45.9 percent in the nine months to Sept. 30.

Europe's biggest telecoms group by revenue reported net profit down 9.4 percent in the period to 2.85 billion euros ($3.56 billion), just above analysts' forecasts. Operating income dropped 12.6 percent to 12.33 billion euros and revenue shrank 10.9 percent to 37.98 billion euros.   Continuación...