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Wednesday, July 26, 2006

España: Voda v Telefónica (2Q 2006)

In the interest of fairness, after reporting on Voda getting trounced in Italy by the incumbent during the 2Q, I thought I’d see how the current star performer of the EuroVodaPortfolio in España is sizing up against Telefónica Móviles who reported this morning.

vod espana telefonica

Vodafone albeit from a much smaller base is rapidly improving its’ revenue market share. What is interesting though is that the overall market is still growing, witness that Telefónica is still growing healthily and therefore the competitive pressures are lower.

Also interesting is that Telefónica managed to grow OIBDA margins a full 220 basis points to 45.4% giving quarterly OIBDA of €1,024m. Not only did the revenues increase, but the costs decreased, seemingly because of a lower churn rate. The Voda margin is considerably smaller (approx. 34%) than Telefónica’s though this is probably more due to the lack of scale and rate of growth.

It also helps quite a lot that there are only 3 players in the Spanish market and therefore competition is limited. I suspect that this is all going to change in the near future as Amena is rebranded to Orange and Xfera enters the scene.