Telefónica's revenues for the second quarter totaled €10,400 million, an increase of 0.8% over the same period of the previous year. The main difference compared to the balance sheet of the second quarter of 2021 is that in that period, €10,559 million were extraordinary revenues from the sale of assets in Europe and the Americas. Therefore, while the operating data for the quarter were balanced in the year-on-year comparison, the balance sheet items related to OIBDA and net income showed this difference. OIBDA totaled €3,146 million, down 76.8% year-on-year. And net income totaled €320 million in the quarter, 95.9% below that of the second quarter of 2021.

José María Álvarez-Pallete, Telefónica's CEO, said: "We continue to improve our growth momentum, seizing opportunities in our markets and delivering on our strategy focused on value creation."

Álvarez-Pallete remarked as highlights of the quarter the launch of the "miMovistar" portfolio in Spain; the integration of Oi's assets in Brazil; the acceleration of investments in digital infrastructure in the UK and VMO2's revenue growth; commercial and financial momentum in Germany. The executive also highlighted the performance of Telefónica Tech and Telefónica Infra.

By geographic segment, the most important contribution to net revenues in the quarter came from the business in Spain, with €3,085 million. Hispam added €2,376 million; Brazil, €2,257 million and Germany, €2,003 million. OIBDA margin ranged from 40.3% in Brazil to 20.9% in the Hispam region.

Operations. Telefónica reported 359.2 million retail accesses, 4.6% more than a year earlier. The bulk of these were mobile accesses, with 293.6 million and a 6.8% year-on-year increase. The growth rate of postpaid accesses tripled that of prepaid accesses. And mobile accesses for IoT grew by 20.6% in the quarter, to 33.9 million.

In the quarter, FTTH gained space within the Ultra Broadband Business Segment (UBB), going from 51% of accesses in the second quarter of 2021 to 57% in the same period of 2022, with 13.2 million and a growth of 18.3% compared to a year ago.

The company replicated the decline that other global operators have shown in fixed telephony accesses (down 9.1% year-on-year) and pay TV accesses (down 4%).

Hispam. In the region, retail accesses grew by 0.5% year-on-year to 110.1 million. Mobile accesses accounted for the bulk of the total, 94.5 million (up 1.2% year-on-year), with postpaid accesses growing at a higher rate (4.8%). Wireline grew strongly in the year, reaching 4.6 million accesses, with a 19% increase between the second quarter of 2022 and the same period of 2021.

According to the balance sheet, FTTH deployment is leveraged on the Chilean and Colombian InfraCos and the agreements with ATP and ATC. Thus, the deployment of alternative models represents 62% of the real estate units (UUII, in Spanish) passed with FTTH in the last 12 months.

Hispam has 14.8 million UUII with FTTH and cable and added 3.2 million in the second quarter compared to a year ago. The operator highlighted the growth in Chile and Colombia, where connections increased by 31% and 62% year-on-year to June 2022, which enabled it to maintain its uptake at 31% despite the acceleration in deployment.

Churn remained stable in the year-on-year comparison at around 3%, while ARPU grew by 1.5% to €3.6.

Debt. In the second quarter of this year, net financial debt increased by €1,364 million, mainly affected by the acquisition of the mobile assets of Oi and BE-terna for €1,621 million. Shareholder remuneration for € 353 million, labor commitments for € 215 million and other costs, such as the renewal of spectrum in Colombia, also had an impact. Thus, total debt amounted to €26.7 billion as of June 30, 2022.

Future. Telefónica considered that in the second quarter of 2022 it consolidated its most accentuated business trends. For example, the evolution of the fiber network (ready for XGS-PON) is based on the Open Broadband project, where the transition will be gradual, with laboratory and field tests during 2022, before the commercial deployment in 2023 in Brazil.

With respect to homes, the company is targeting Open Access for Home (Opa-H), which involves virtualizing the application layer of Customer Premises Equipment (CPE) to build a differential value proposition open to third parties. In this regard, open access fixed customer equipment (self-developed) totaled 47.5 million, with 11.7 million "Home Gateway Units" serving 94% of FTTH customers.

Regarding 5G, coverage is available in more than 600 cities and towns in the United Kingdom, close to 1,500 cities in Germany and 35 cities in Brazil. In Spain, 5G NSA covers around 83% of the population. LTE coverage stands at 90% (99% in Europe and 86% in Latam), up 6 percentage points year-on-year.

Telefónica said it will continue on the path of network virtualization and softwarification, the telco cloud paradigm and Open RAN architectures in mobile networks and Open Broadband in fixed networks.

It also aims to increase field validation in its key markets. It aims to reach 30-50% of total RAN growth between 2023-2025 and continue to test Network Slicing use cases with partners. And it sees another lever to monetize 5G networks with NaaS or exposure of network capabilities through APIs.