FRANKFURT, March 16 Telecoms operator Telefonica
Deutschland is looking into a possible bond issue to
finance its debt more cheaply following its spin-off from
Spanish parent Telefonica last year, its finance chief
told a German newspaper.
Rachel Empey said a bond was "a possibility that we are
investigating". She added in comments published by the
Boersen-Zeitung on Saturday that the company might completely
switch to bond financing.
Telefonica Deutschland, the smallest of Germany's four
carriers, had net debt of 842 million euros ($1.1 billion) at
the end of 2012, 0.7 times its operating income before
depreciation and amortisation (OIBDA).
Chief Executive Rene Schuster said in the same interview
that Telefonica Deutschland was sticking to its goal of raising
its dividend over the coming years - it will pay out about 500
million euros for 2012 - but declined to be more specific,
saying the company had to be flexible.
He said the company had felt sharper competition since the
start of the year and a change in user behaviour as customers
used Internet voice and text services on their data packages
instead of making traditional voice calls and sending SMS texts.
Telefonica Deutschland, which operates under the O2 brand,
has reacted by shaking up its mobile packages, offering phone
and text services for free since the start of this month in
combination with data packages costing 19.99-49.99 euros per
Schuster said the company was "doubtless early to the game,
perhaps a bit too early, but better than being too late". He
said he expected positive effects from the switch by the summer.
Telefonica Deutschland has seen its wireless sales growth
consistently slowing - to 3.6 percent in the fourth quarter - as
customers made fewer calls but spent more time online on
smartphones and tablets.
($1 = 0.7654 euros)
(Reporting by Georgina Prodhan in Vienna, Editing by Mark