Telefonica has reported net income of 1.075 billion Brazilian Reals in 2002, for a nominal drop of 31.7% compared with the previous year (1.576bn BRL). Investment totaled 1.658bn BRL in the year. The telco paid more than 4bn BRL in federal, state and municipal taxes. At the end of 2002, 90% of its debt was in foreign currencies.
Strategy shift
Telefonica?s earnings report says the salient feature of 2002 was a change of strategic focus. Once it had achieved the universal access and quality of service targets set by Anatel, the focus shifted to building better customer relationships. This entailed a more comprehensive service offering, made possible by target fulfillment. International calls came on stream in May and domestic long-distance calls in July. The report estimates Telefonica?s market share as 36% in domestic long distance and 32% in international, for calls originating in São Paulo State. The number of access lines in service fell 0.9% from 12.6 million to 12.5m. EBITDA totaled 4.953bn BRL in 2002, for a year-over-year increase of 8.3%. Net operating revenue rose 11.5% to 10.088bn BRL.
Telefonica Data and its wholly-owned subsidiary Telefonica Empresas reported a net loss of 30.8m BRL in 2002, compared with a loss of 22.9m BRL in 2001. Management attributed the deterioration to investment in expansion and modernization of plant, especially packet-switching and IP networks and data centers. Telefonica Data invested 140m BRL in 2002. Net operating revenue in this segment rose 78% to 315.7m BRL. EBITDA totaled 33.8m BRL, up 291% in the year.
