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Telefónica sees OTT growth offset pay TV decline

Telefónica’s TV base continued to grow in the third quarter thanked to the continued success of its OTT offerings, with its traditional cable and IPTV subscriber numbers declining.

Overall, the international telco had 8.14 million pay TV customers at the end of the quarter, down 5.4% year-on-year, with a decline from 8.243 million in the second quarter.

However, the group’s overall video base stood at 9.6 million, comprising the pay TV base plus 1.4 million active OTT subscribers. The latter saw an increase of 24% year-on-year.

In its home market of Spain, Telefónica saw its pay TV base decline by 2.1% to just over four million. However, the company said this was due to lower-value customers leaving, combined with a net loss in subscribers to its Movistar+ Lite offering, which saw numbers jump during the initial phase of the COVID-19 lockdown.

In Brazil, Telefónica saw pay TV numbers slide by 9% to 1.258 million, with a rise in IPTV numbers failing to offset a decline in satellite customers.

The same applied in Spanish-speaking Latin America, where an 8.1% year-on-year decline left the operator with 2.854 million pay TV customers, including 501,000 IPTV subs, up 80.5% year-on-year. The company said that its IPTV base had grown strongly on the back of fibre fixed access penetration.

Separately, Telefónica has forged an alliance with investment outfit Allianz Capital Partners to create a 50:50 JV to roll out fibre in Germany.

Telefónica’s infrastructure unit, Telefónica Infra, will hold a 40% stake in the new outfit, while Telefónica O2 Deutschland will hold 10%. Allianz will hold the remaining 50%.

The venture will roll out fibre in underserved areas of the country on a neutral open-access basis. The company aims to invest around €5 billion in passing over two million homes in rural and semi-rural areas.