Amidst falling sales in its home base of Spain, Telefonica's gains in Latin America market helped drive up the European carrier's profit 22 percent in Q4 09. Telefonica's net income climbed to $3.31 billion from $2.72 billion in Q4 08, while sales grew 1 percent to $20.3 billion.
Company chairman and CEO Cesar Alierta says Telefonica is betting on Latin America as its revenue growth engine to get more investors interested in the company during one of the worst Spanish economic recessions in six decades.
While sales in Spain were down 1.6 percent, in Latin America, Telefonica's sales were up eight percent to 8.6 billion.
But maintaining growth in Latin America, suggests a Wall Street Journal article, will be anything but easy. A key setback for Telefonica came in January when it said it would have to take $2.46 billion out of its Venezuelan assets when the country's government devalued the bolivar. A chance at expanding its footing in the Brazilian telecom market was put out when French conglomerate Vivendi outbid it for wireline provider GVT.
- Bloomberg Business Week has this article
- Wall Street Journal also has this perspective
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