\tTelefonica reported a dip in net profit for Q2 as negative foreign exchange movements and a large provision for tax litigation took their toll, while its UK unit revealed plans to launch commercial 5G services in October.<\/p>\n
In the company\u2019s Q2 results statement, Telefonica CEO Jose Maria Alvarez-Pallete (pictured) said its commercial strategy was \u201cbearing fruits\u201d, hailing the impact of ongoing digital transformation efforts at the operator group.<\/p>\n
He also pointed to a ninth successive quarter where the it cut the company\u2019s debt pile, which stood at \u20ac40 billion as of the end of June.<\/p>\n
In an attempt to find future cost savings, during Q2 Telefonica signed network sharing agreements in Brazil, Germany and the UK.<\/p>\n
The UK deal, an upgraded agreement with Vodafone, [1] will see the pair share some 5G infrastructure and is expected to speed rollout of the new network technology.<\/p>\n
Alongside results from its parent company, UK unit O2 confirmed it would launch its first wave of six urban locations in October. It plans to increase this to 20 by the end of the year and 50 by Summer 2020.<\/p>\n
This timeline will likely make it the last of the country\u2019s four operators to light up the new network technology to customers.<\/p>\n
Rivals EE and Vodafone switched-on services in their first locations in May [2] and July [3] respectively. The country\u2019s other operator, 3 UK, expects to begin sales of its fixed-wireless 5G service next month.<\/p>\n
Analyst Paolo Pescatore noted that O2 UK’s 5G launch “feels somewhat forced upon in light of moves by the other mobile operators” but stressed “it is still early days as the network [tech] is not widely available.\u201d<\/p>\n
\u201cThe move is good in the interests of UK and it will be one of the first countries in the world to have all mobile operators offering 5G connectivity.\u201d<\/p>\n
Results
\nDuring Q2, Telefonica reported a 4.5 per cent year-on-year fall in net profit to \u20ac862 million on broadly flat revenue of \u20ac12.1 billion.<\/p>\n
Its bottom line was hit by a \u20ac152 million provision for ongoing tax litigation, a \u20ac101 million adjustment due to hyperinflation in Argentina and several other one off items. It also booked a tax refund in Spain and earnings from the sale of assets in Latin America.<\/p>\n[1] https:\/\/www.mobileworldlive.com\/featured-content\/top-three\/vodafone-o2-finalise-uk-5g-network-sharing-pact\/
\n[2] https:\/\/www.mobileworldlive.com\/featured-content\/home-banner\/ee-sets-5g-launch-date-puts-huawei-on-hold\/
\n[3] https:\/\/www.mobileworldlive.com\/featured-content\/home-banner\/vodafone-uk-sees-price-as-winning-formula-for-5g\/<\/p>\n","protected":false},"excerpt":{"rendered":"
Telefonica reported a dip in net profit for Q2 as negative foreign exchange movements and …<\/p>\n
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