Telefónica Deutschland feels the migration from 1&1

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Telefónica Deutschland remains popular with mobile customers and was able to gain 184,000 mobile customers in the second quarter, but the migration of 1&1 to the competition is making itself felt in sales and profits. This is evident from the results for the second quarter of 2025, which the company, known under the O2 brand, presented in Munich on Wednesday.

According to the results, Telefónica Deutschland generated total revenue of 2.04 billion euros in the second quarter, which corresponds to a decline of 2.4 percent compared to the same quarter of the previous year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 5.9 percent to 626 million euros.

Fixed network up

Service revenue from mobile services fell by 3.4% to just under EUR 1.4 billion, while the fixed network increased by 0.7% to EUR 125 million. The company generated 412 million euros (minus 3.7 percent) from the sale of hardware.

The company attributes the decline in turnover and profit to the “expected transformation of the partner business”. This refers to the migration of roaming customers 1&1 to Vodafone. Telefónica Deutschland speaks of “short-term” effects here. Apart from this, the development of the core business is positive, and there is also dynamic growth in the Internet of Things segment.

Longer replacement cycles

In addition to the growth in mobile customers, the average revenue per customer also remained stable, Telefónica Deutschland added. In the first half of the year, the company also put 200 new mobile sites into operation. While the trend towards higher-quality connections is continuing in the fixed network segment, hardware sales are characterized by longer replacement cycles and restrained consumer behavior.

“The quality of our network is very good, and Germany is also a country with an overall very well-developed mobile network for the population and the economy,” says CEO Markus Haas and calls on politicians to take further steps “to ensure that the industry's annually growing expansion investments also have a lasting effect. To achieve this, we need simplifications in construction law, bureaucratic relief, and a long-term frequency policy.”

Parent company with a loss

Meanwhile, the Spanish parent company Telefónica is struggling with the consequences of its withdrawal from South American markets. Telefónica reported a loss of 51 million euros for the second quarter, which includes write-downs of 204 million euros on sold Latin American subsidiaries. Turnover fell by 3.7 percent to 8.95 billion euros.

(vbr)