Telefonica today indicated an increase in its Capital spending (Capex) in 2014 focusing on 4G and fiber. The telecoms said its Capex to sales will be 15.5-16 percent this year against 14.5 percent in 2013.
The expected Capex will be around 9.1 billion euros in 2014 if the company is going to spend 16 percent of its annual sales.
The telecoms posted 57,061 million euros revenues last year.
Telefonica’s 2013 Capex was 9,395 million euros including 1,224 billion euros for spectrum acquisition, primarily in the United Kingdom, Brazil, Peru, Colombia, Spain and Uruguay.
The announcement from Telefonica chairman comes at a time when Vodafone stepping up its network modernization plan with “Project Spring”. Vodafone yesterday announced its deals with Ericsson and NSN to improve quality and coverage of its network.
Telefonica Capex focus
In 2014, Telefonica will double the fiber coverage in Spain to 7.1 million homes passed, reaching the highest coverage levels among the largest economies in Europe.
In Brazil, the telecom operator will increase fiber coverage to 2.5 million homes.
In the mobile business, Telefonica will expand 4G in Europe reaching an average coverage of more than 50 percent, while it will focus on 4G data market in Latin America. Telefonica Latin America mobile data business posted 9.3 percent growth in revenue in 2013.
The focus of the Capex increase is aimed at stimulating growth, better network differentiation and to improve market positioning.
César Alierta, chairman of Telefonica, said: “Among our targets, we will accelerate revenue growth and we will increase investments to anticipate to the growing demand from the increasingly intensive data service usage.”
Telefonica revenue
Telefonica 2013 revenue rose 0.7 percent to 57,061 million euros. Group’s net profit rose 16.9 percent to 4,593 million euros.
Telefónica Latinoamérica remained the Group’s main growth driver, with revenues up 9.6 percent compared with 2012. Telefónica Digital revenue rose 19.4 percent.
