Driven by mobile growth in Latin America (+12.9%), Telefónica posted full-year 2008 financial results that were ahead of market expectations. Despite the prevailing operating environment, Telefónica posted growth in all income areas: topline growth was 7.3% (prior guidance range: 6%-8%), OIBDA growth was 10.6% (prior guidance range: 7.5%-11%), while growth in operating profit exceeded guidance at 20.4% (prior guidance range: 13%-19%). 
Telefónica's total accesses grew by 13.2% versus 2007 to around 259 million. This growth was driven by the increases in wireless (+16.6%), broadband (+20.9%) and pay TV (+29.7%) accesses. By region, the contribution by Telefónica Latinoamérica is especially noteworthy, with over 158 million accesses across the region at the end of December (up 18.0% on December 2007).
Some highlights:
- Telefónica earmarked 69% of free cash flow to shareholder remuneration both in dividend payments and share buybacks.
- CapEx in the full year amounted to 8,401 million euros, up 4.7% on 2007. This increase was mainly driven by investment in broadband, pay TV and expansion of the coverage and capacity of wireless networks in Latin America.
- By access type, the Telefónica Group's wireless accesses stood at approximately 196 million at the end of 2008, with 6.7 million net adds in the fourth quarter and around 24 million6 in the full year. The main countries contributors to net adds were Brazil (7.5 million), Mexico (2.8 million), Peru (2.5 million) and Germany (1.7 million).
- Retail internet broadband accesses stood at around 12.5 million, a year-on-year increase of 21%, driven by the growing penetration of voice, ADSL and pay-TV bundles. In fact, in Spain over 85% of retail broadband accesses are bundled as part of some kind of dual or triple service package while in Latin America 49% of retail broadband accesses are bundled as part of Duo or Trio packages. In the fourth quarter net adds amounted to 0.4 million accesses, with a total of 2.1 million accesses in the full year, of which 1.0 million originated in Latin America, 0.6 million in Spain and 0.5 million in Europe.
- Pay TV accesses stood at over 2.2 million at the end of 2008, up almost 30% on the prior year, driven by net adds of 109,500 in the fourth quarter and some 519,500 in the year. At the end of 2008, the company offered pay TV services in Spain, the Czech Republic, Peru, Chile, Colombia, Brazil and Venezuela.
- In absolute terms, Telefónica Latinoamérica accounted for 38.3% of total Group revenues in 2008 (+2.7 percentage points from 2007), with Telefónica España and Telefónica Europe accounting for 36.0% and 24.7%, respectively.
- At the end of 2008, Telefónica España managed 47.3 million accesses, a year-on-year increase of 2.0%, boosted by a 3.4% advance in mobile accesses (to over 23.6 million) and 13.7% growth in wireline retail broadband Internet accesses to over 5.2 million. Telefónica had an estimated 14% share of the Pay TV market in Spain at year-end, having added 22,943 customers in the fourth quarter and 101,407 in 2008, leading to a total of 612,494 customers (up 19.8% year-on-year). The Spanish wireless market totalled 53.1 million lines at the end of 2008, with an estimated penetration rate of 116% (an increase of more than five percentage points from December 2007).
- At the end of 2008 Telefónica Latinoamérica managed 158.3 million accesses in the region, 24 million more than in 2007, a year-on-year increase of 18.0%.
- Telefónica Latinoamérica had a total of 123.4 million mobile accesses (+22.7% compared with December 2007; +18.1% in organic terms18), with solid growth across all its operations. This increase is due both to the larger number of gross adds reported in the year (+17.8%; +14.2% in organic terms19), and the strong performance of churn, which remained stable compared with 2007. The largest increases in mobile accesses were reported in: Brazil, where Telefónica strengthened its position as market leader with almost 45 million mobile accesses (11.5 million more than in December 2007, with close to 4 million added following the acquisition of Telemig in April 2008); Mexico, where Telefónica continues to gain market share thanks to 22.3% year-on-year growth in its customer base to 15.3 million; Peru, where customer numbers increased by 31.6% year-on-year to over 10.6 million mobile accesses; and Colombia, where accesses grew by 19.0% to almost 10 million customers. The Company also performed well in markets with high penetration levels, such as Argentina, Chile and Venezuela where it continues to achieve significant year-on-year increases in its customer.
