Telefonica Deutschland Predicts Faster Wireless Will Drive Sales

Telefonica (TEF) Deutschland Holding AG, the Telefonica SA unit that first sold shares to the public last year, is relying on the rollout of faster mobile technology and more people surfing the Internet via mobile phones to drive revenue this year.

Operating income before depreciation and amortization in 2012 rose 11 percent to 1.28 billion euros ($1.68 billion), the Munich-based company said today. Sales climbed 3.5 percent to 5.21 billion euros. Mobile data was the main reason for revenue growth, accounting for 1.39 billion euros, the company said.

Telefonica Deutschland plans to gain market share from data services and expects the introduction of faster, so-called long- term evolution wireless technology to help drive sales and meet growing consumer demand for mobile data. The company vies with Royal KPN NV’s E-Plus unit for the No. 3 spot in Germany behind wireless leaders Vodafone Group Plc (VOD) and Deutsche Telekom AG. (DTE)

“Data is the core of our success in 2013,” Chief Executive Officer Rene Schuster said on a conference call today. The company expects to outperform the German mobile-phone market and increase market share this year, he said.

Telefonica Deutschland fell 2.2 percent to 5.60 euros at 1:53 p.m. in Frankfurt trading.

Telefonica, Spain’s former phone monopoly, sold about 23 percent of its German unit in Europe’s largest initial public offering in 2012, at 5.60 euros a share.

Schuster declined to comment on whether the company would be interested in partnering with German cable operator Kabel Deutschland Holding AG (KD8), after people familiar with the matter said that Vodafone put on hold plans to approach Kabel Deutschland about a takeover bid.

Capital expenditure for rolling out the LTE network isn’t expected to exceed the 680 million euros the company spent in 2010 on its third-generation wireless capacity, Telefonica Deutschland said.

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net.

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.

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