Telefonica Deutschland upbeat as mobile service revenues pick up

FRANKFURT (Reuters) - Telefonica Deutschland O2Dn.DE continued its steady recovery in the second quarter as growth in mobile service revenues turned positive, helping lift top-line revenue by 1.6%.

Germany’s No.2 mobile operator by revenues also reported a 21.5% rise in operating income before depreciation and amortization (OIBDA) - a proxy for cash flow - although this was lifted by changes in lease accounting rules.

Stripped of that factor, OIBDA rose by 0.7% in the first six months of the year, the company said in a statement.

Telefonica Deutschland, which operates under the O2 brand, reiterated its guidance for stable revenues and flat-to-slightly-better profitability as it prepares to launch 5G mobile services.

CEO Markus Haas said Telefonica was well placed to compete, having also gained access to rival Vodafone's VOD.L cable network - a concession that won European Union backing for the UK-based company to buy Liberty Global's LBTYA.O assets in Germany and central Europe.

Reporting by Douglas Busvine, editing by Riham Alkousaa