1Q17 Results: Telefonica Brasil S.A.

SAO PAULO, May 9, 2017 /PRNewswire/ -- Telefonica Brasil - (Bovespa: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for the 1Q17. Service revenue acceleration and consistent cost decline lead to margin expansion and solid EBITDA growth in 1Q17.

Market share expansion, reaching 30.5% in March 2017 (+2.1 p.p. y-o-y).

Mobile ARPU recorded y-o-y growth of 4.1% in 1Q17, fueled by a higher share of postpaid clients in the mix and increased data usage. Data ARPU grew 35.8% y-o-y in 1Q17, corresponding to 68.6% of total ARPU.

Broadband accesses totaled 7.3 million customers in 1Q17 (+1.7% y-o-y), with FTTx¹ connections accounting for 57.6% of the base, accompanied by y-o-y growth of 6.9%. Broadband ARPU increased 9.2% in 1Q17 over 1Q16, influenced by the evolution of the ultra-broadband customer base.

Net operating service revenue grew 2.0% in 1Q17 over 1Q16 (4.2% up y-o-y excluding regulatory effects), maintaining the positive trajectory observed in the last quarters.

Mobile services revenue rose 5.0% y-o-y in 1Q17. Excluding the effect from MTR reductions in 2017, this line increased 7.3% over 1Q16. Data and digital services revenue increased 37.0% y-o-y in 1Q17, accounting for 68.6% of mobile services revenue.

Recurring Operating costs fell 1.1% in 1Q17 over 1Q16 (LTM IPCA +4.6%), demonstrating the continued efforts and focus on synergy delivery, pursuit of efficiencies and end-to-end digitalization. Including the non-recurring effect of the towers sale in 1Q16, costs increased 6.5%.

Recurring EBITDA totaled R$3.5 billion in 1Q17, 7.3% up on 1Q16, accompanied by an EBITDA margin of 33.2% (+1.8 p.p. y-o-y) fueled by the acceleration of mobile service revenues and efficiency measures adopted by the Company.

CAPEX amounted to R$1.3 billion in 1Q17, focused on 4G coverage (304 new cities added in the quarter) and FTTH expansion.

RecurringEBITDA - Capex grew 22.6% in 1Q17 over 1Q16, reaching R$2.2 billion

Recurring Net income totaled R$996.2 million in 1Q17 (+13.3% y-o-y), with IOC for the fiscal year amounting to R$530.0 million.

TELEFONICA BRASIL – Investor Relations
Eduardo Navarro
David Melcon
Luis Plaster
Joao Pedro Carneiro
+55 11 3430-3687 / ir.br@telefonica.com

To download the complete version of the Company's earnings release, please visit our website: http://www.telefonica.com.br/ir

¹ FTTx includes FTTH (Fiber to the home), FTTC (Fiber to the cabinet) and cable customers

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SOURCE Telefonica Brasil S.A.