Telefónica FTTH: 30m homes by 2026
November 8, 2023
From David Del Valle in Madrid
Spanish telco Telefónica has announced its GPS Plan (Growth, Profitability and Sustainability Plan) for the 2023-2026 period, with the aim of reaching 30 million FTTH homes passed, up from the current 20 million.
Overall, the group will have 100 million FTTH passed homes worldwide by that date from the current 70.3 million. In a year, its FTTH coverage has increased by 13 per cent. As for 5G, as of September 30th, 5G coverage reached 87 per cent of Spanish population, 92 per cent in Germany, 42 per cent in Brazil and 49 per cent in the UK.
The new plan estimates that annual growth rate (CAGR) will be around 1 per cent for revenues; 2 per cent for EBITDA; 5 per cent for EBITDAaL-CapEx; and above 10 per cent for cash flow generation (FCF).
The new GPS (Growth, Profitability and Sustainability) plan also envisages a favourable evolution of the net financial debt to EBITDAaL ratio to 2.2-2.5x by 2026. While confirming that Telefónica has overcome its most investment requirements, the new targets also anticipate a progressive reduction in CapEX/sales to below 12 per cent by 2026, which represents a drop of over 2 percentage points from the 2023 targets.
The GPS plan is based on five key vectors to accelerate its fulfilment: (1) the sustainability of B2C revenue growth; (2) maintaining the good momentum of the B2B business; (3) the evolution of revenues derived from agreements with the company’s partners; (4) obtaining efficiencies that help reduce the cost structure; and (5) reducing investment.
The company said that in the third quarter revenues remained stable at €10.321 billion and net income reached €502 million, 9.3 per cent more than in the same period of 2022. OIBDA grew again in the third quarter, accelerating 2.5 per cent to €3.33 billion.