telecommunications
Telefónica again with a profit
The headquarters of Telefónica Deutschland in Munich. Photo: Sven Hoppe/dpa
© dpa-infocom GmbH
There are three mobile network operators in Germany, one of which is O2. The Munich company was in the red for years. But that’s in the past, the present is profitable.
Eight years after the takeover of E-Plus, Telefónica Deutschland is stabilizing its business in the black. The Munich-based company with its O2 brand published figures for 2021 on Wednesday, according to which it posted a net profit of 211 million euros.
That was less than a year earlier, when the value was 328 million euros. But the year 2020 could only be closed with a net profit because of a big partial payment for the sale of the radio tower division. In the last quarter of 2021, however, the bottom line was that the business was profitable even without the money from this sales deal.
The employment contract of company boss Markus Haas was recently extended by three more years until the end of 2025. The 49-year-old has been on board for a long time: in 1998 he started working for the company, which was then called Viag Interkom. In 2017 he took over as CEO. Haas spoke of a record year. “Operationally and financially we have been able to use our strong momentum.” According to the information, sales increased by 3.1 percent to 7.8 billion euros in 2021 – higher than ever. The operating result also increased.
Successful especially in mobile communications
Telefónica sells mobile and landline Internet contracts, and the company also has end devices in its range. Business picked up, especially in mobile communications, despite a negative corona effect. Because far fewer people travel far away than before, Telefónica gets significantly less roaming revenue than before the pandemic.
With a view to the mobile communications division, company boss Haas was satisfied. Last year, 1.5 million new contract customers were registered – that was the strongest growth since 2014. Demand for more expensive tariffs also increased – on average, each customer paid a little more money to O2.
Telefónica has had difficult years: After the takeover of E-Plus in 2014, the company was in the red for six years. In 2020, the leap back into the black was achieved. The company, which belongs to the Spanish Telefónica Group, has around 7,400 employees in Germany. In addition to the Munich headquarters, there is a second large company location in Düsseldorf.
Telefónica is one of the three German mobile network operators; the other two are Deutsche Telekom and Vodafone. The 4G network coverage of the competitors was significantly better than that of O2 for a long time, but after high investments, the Munich company was able to largely make up for the gap.
5G in focus
In the meantime, O2 is focusing on the 5G radio standard when it comes to network expansion. At the beginning of the year, the 5G transmitters from O2 reached 30 percent of German households, by the end of 2022 this figure should be 50 percent. “When it comes to 5G, we’re going full throttle,” said Haas. By the end of 2025 at the latest, “the entire population” should be reached.
However, the competition is farther along when it comes to 5G coverage. So far, 5G has not played a major role for consumers, since a 4G connection is completely sufficient for most mobile applications. In view of a general increase in the need for data and because of new technical possibilities such as “augmented reality” applications, the wireless standard should also be very useful for consumers in the future.