Roaming charges drop smacks O2 daddy Telefonica in the profits

Chief reckons biz did well despite 'negative impact' of EU regs

Operating profit at Spanish telco Telefonica - owner of UK cell network O2 - dropped 1.9 per cent in its third quarter to €4.1bn (£3.6bn), mainly due to the loss of roaming revenue and changes to exchange rates.

Revenue dropped 2.5 per cent in the quarter to €12.7bn (£11.3bn), for the quarter.

Sales in Blighty were up 1.1 per cent, however operating income fell by 4.7 per cent to €412 (£370m), which it said was due to "the strong roaming impact in the quarter".

It added 143,000 new users in the UK during the quarter with 32,000 new contract customers.

In June the EU abolished roaming charges, meaning travellers can call, text and use their mobile data at no extra cost, regardless of the EU country they're visiting.

However, analyst firm Juniper Research has estimated that globally mobile operators will lose billions this year as a result of the changes.

Operators took home $21bn (£15.9bn) in 2016, with that figure expected to plummet to $12bn (£9.09bn) next year. In 2015 UK mobile operators made $3.8bn (£2.8bn) in roaming revenues, out of total sales of $26.3bn (£19.9bn).

Jose Maria Alvarez-Pallete, Telefónica chairman and chief executive, claimed the company had performed well "despite the negative impact of the new regulation in Europe."

He said: “We continued strengthening our balance sheet position with a clear advance in de-leveraging the company thanks to growing cash-flow generation.”

In the UK, O2 has today launch a new tariff that will allow customers to move their bills up or down each month, allowing them to adjust how much data they expect to use. ®

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