Having recently bought rivals in Germany and Brazil and agreed the sale of its British business to BT, Telefonica is now focused on fixing its Spanish market, which accounts for about a quarter of revenues and has shrunk 40 percent since the start of 2009.
Telefonica last month announced price rises on most of its phone, Internet and television packages in Spain and hopes this will help boost revenue at home this year.
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For now, however, the Spanish division reported a 3.8 percent drop in revenues to 2.88 billion euros ($3.3 billion) while operating income before depreciation and amortisation (OIBDA) fell 8.6 percent from a year ago and 5.2 percent from the previous three months. Margins were also under pressure.
The rest of the group fared better, with German revenues rising 69.4 percent thanks to the acquisition of E-Plus, Latin America up 19.6 percent and revenue in Brazil expanding 4.8 percent.
This helped revenues rise 12.6 percent to 11.54 billion euros at the group level and for OIBDA to climb 7.7 percent to 3.62 billion euros. The two measures were also boosted by a weaker euro and came in above analysts' expectations.
Net profit jumped 162 percent to 1.8 billion euros thanks to a one-off financial boost from the sale of the British division.