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Telefonica S.A.

5/20/2013, 9:42 PM ET

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Wednesday, May 8, 1:40 PM Investors are taking Telefonica's (TEF - unchanged) Q1 report in stride. The carrier saw revenue decline 8.8% Y/Y €14.1B, as European weakness (esp. in Spain) and Venezuela's currency devaluation offset Latin American growth. Net profit rose 21% Y/Y to €902M, and EPS was €0.20 ($0.26). LatAm made up 51% of revenue, and Brazil passed Spain to become Telefonica's largest market. Net debt fell by €653M Q/Q to €51.2B, as debt-reduction efforts continue. Postpaid net adds rose by 1.3M, and total connections +2% Y/Y to 315.7M. Mobile connections +3% to 247.3M, and mobile data is now 37% of mobile service revenue. Comment! [Tech, Earnings]
Tuesday, May 7, 12:07 PM Telefonica (TEF -0.4%) is thinking of selling its massive/iconic Madrid HQ as part of its debt-reduction efforts, five sources tell Bloomberg. The HQ, which Telefonica tried to sell 5 years ago, has an estimated value of €1B ($1.3B); one source says Telefonica might lease back up to 90% of its space following a sale. Telefonica recently sold a 40% stake in its Central American assets for $500M to help lower its debt load, and is reportedly considering the sale of its Telecom Italia stake, China Unicom stake, and German wireline ops, as well as its Irish and Czech mobile units. 1 Comment [Tech, M&A]
Thursday, April 25, 9:47 AM Telefonica (TEF -0.3%) is thinking of selling its German wireline ops, Bloomberg reports. One source adds Telefonica, which has been eying asset sales to pare its debt load, is open to sharing its mobile network with a rival or merging the business with KPN's (KKPNY.PK) E-Plus unit. Vodafone (VOD), which seems intent on growing its German wireline presence, is a logical buyer for the wireline business, which claims 2.4M broadband subs and has an estimated value of €2B ($2.6B). Liberty Global (LBTYA), reportedly eying Kabel Deutschland, is another possibility. Comment! [Tech, M&A]
Monday, April 15, 4:29 PM Telefonica (TEF) responds to the $1.4 devaluation of accumulated dividends for its Venezualan unit (now valued at $3B) by announcing plans to increase the division's capex by 78% in 2013 to 3.9B bolivars ($619M) - foreign companies aren't allowed to repatriate their profits. Another $95M will be spent on spectrum licenses. The division's sales (boosted by massive inflation) are expected to grow 37% this year to $3.7B, and its OIBDA by 22% to $1.5B. 1 Comment [Tech]
Friday, April 12, 3:49 AM Hutchison Whampoa would want to control any company created by merging its 3 Italia mobile unit with Telecom Italia's (TI) cellular operations. Hutchison would become TI's largest shareholder as part of the deal, possible causing the unravelling of the Telco consortium that holds 22.4% in the former monopoly. Telco includes Telefonica (TEF), Intesa Sanpaolo (IITOF.PK) and Mediobanca (MDIBF.PK). TI is also looking at spinning off its wireline operations. Shares +4.3% in Milan. Comment! [Tech, Consumer, M&A, On the Move]
Thursday, April 11, 6:40 PM Following today's meeting, Telecom Italia's (TI) board has signed off on talks with Hutchison Whampoa about merging the companies' Italian mobile ops, formed a committee to quickly review any deal, and ordered management to study the feasibility of spinning off TI's Italian wireline ops. Regulators will undoubtedly take a close look at the fact TI and Hutchinson have a combined 45% of the Italian mobile market, easily eclipsing the 32% and 23% respectively held by Vodafone and Wind. Comment! [Tech, M&A]
Thursday, April 11, 1:37 PM Telecom Italia (TI +5.9%) jumps as hopes of an Italian mobile merger with Hutchinson Whampoa grow. A Telecom Italia board meeting to discuss a possible merger took place today, and Hutchinson has stated it's willing to support a deal if it can obtain the largest stake in TI. That would mean a bigger stake than the 22.4% jointly held by Telefonica (TEF +0.4%) and three Italian banks. Hutchinson has reportedly been eying a ~30% stake, and Telefonica is reportedly willing to unload its position in TI. Regulatory and/or political opposition could still scuttle a deal. Comment! [Tech, On the Move, M&A]
Tuesday, April 9, 11:26 AM Telefonica (TEF +1%) is willing to sell its 10.5% indirect stake in Telecom Italia (TI +4.3%), two sources tell Bloomberg. Telefonica has been insisting it has no plans to sell the stake, which is worth $1.6B and is the result of a 22.4% stake held by Telefonica and 3 Italian banks. But the European/Latin American carrier has been eying a variety of asset sales as it tries to further pare its debt load. Reported merger talks regarding TI and Hutchinson Whampoa's Italian mobile units could be influencing Telefonica's thinking. Comment! [Tech, M&A]
Tuesday, April 9, 5:24 AM Telecom Italia (TI) shares +3.6% to €0.595 in Milan following a report that Hong Kong's Hutchison Whampoa (HUWHF.PK) could acquire a 29.9% holding in TI for €1.2 a share. In return, TI would be able to buy Hutchison mobile unit 3 Italia. The deal would make Hutchison the largest shareholder in TI, as its stake would exceed the 22.4% held by the Telco consortium, which includes Telefonica (TEF). 1 Comment [Tech, Consumer, M&A]
Friday, April 5, 4:33 PM Aided by asset sales and IPOs, Telefonica (TEF +0.4%) is set to pare its net debt to €47B ($61.1B) at year's end from a 2011 peak of $56.3B ($72.3B). The carrier's debt burden could fall further if it unloads additional assets, such as O2 Ireland, a 70% stake in in Telefonica Czech Republic (valued at €2.6B), and a 5% stake in China Unicom (valued at €1.3B). But with Telefonica expected to produce €6B-€7B in free cash flow this year, it isn't under serious pressure to sign off on fresh moves. Comment! [Tech]
Thursday, April 4, 2:08 PM Telefonica (TEF) obtains a $257M credit line from Canada's export agency to purchase BlackBerry (BBRY) phones and services. The deal comes shortly after the debt-laden carrier obtained a $1B credit line from Sweden's export agency to buy mobile infrastructure gear from Ericsson. 18 Comments [Tech]
Wednesday, March 27, 10:29 AM European tech and telecom stocks are underperforming as continental equities sell off on Italian concerns. STM -3.9%. ALU -2.3%. NXPI -1.4%. FTE -4.3%. TEF -2.1%. TI -4.3%. VOD -1.7%. One exception is Nokia (NOK +0.3%), which is benefiting from an upgrade to Buy from Swedbank. 6 Comments [Tech, On the Move]
Wednesday, March 27, 4:37 AM Telefonica (TEF) yesterday sold 2% of its treasury stock to professional investors via a private placement for €10.80/share, or at a 3.9% discount to Monday's closing price. Telefonica booked a €31M accounting gain from the sale, which will allow it to cut its debt by €975M. The telecom operator intends to reduce its debt to €47B by the end of the year from €51.3B in Q4 2012. Comment! [Tech, Consumer]
Tuesday, March 26, 1:58 PM The EU has an ambitious broadband agenda: It wants 50% of regional households to have 100Mbps+ connections by 2020, and all households to have 30Mbps+ connections. To deliver on these goals, the EC is now proposing every new home support high-speed broadband, and (estimating up to €60B in savings) is looking to cut permit wait times for broadband and 4G tower building permits. However, the proposals come as legislators, citing the continent's economic woes, consider slashing €50B-€70B from the digital part of the Connecting Europe Facility. 2 Comments [Tech]
Tuesday, March 19, 10:31 AM Morgan Stanley is becoming more positive on America Movil (AMX +2.1%) and Telefonica (TEF +0.9%), upgrading the former to Equalweight and the latter to Overweight. MS thinks Mexican regulatory fears are now priced into AMX shares, and argues near-term results could be propped up by lower customer acquisition/retention costs and price hikes for the carrier's least profitable customers. As for Telefonica, the firm thinks the carrier's home market of Spain has become "more attractive," thanks to Telefonica's end-to-end service offerings. Comment! [Tech, Quick Ideas]
Sunday, March 17, 4:32 AM Apple (AAPL), America Movil (AMX) unit Telcel and Telefonica (TEF) might have to start paying damages to Mexican technology services company Ifone after the country's Supreme Court upheld a ruling that firm owns the rights to the Ifone brand name. Comment! [Tech, Consumer]

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