Telefonica loses $600 million in Q3, first loss in 9 years

Spanish and Latin American mobile giant Telefonica reports its first quarterly loss in 9 years, after heavy layoffs hit the company harder than it previously expected.

European phone giant Telefonica reported its first quarterly loss in nine years, as its main Spanish customer based switched to cheaper rivals' offers.

The third-quarter net loss was €429 million (nearly $600 million), which was not helped by a €2.7 billion in job-redundancy expenses for over 6,500 workers, the Madrid-based company announced today.

While analysts had predicted a loss, some were "shocked" as to why they had not lowered their guidance, a London-based analyst said, speaking anonymously to Reuters.

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Telefonica's sales in its home market of Spain slid by nearly 9 percent, as the company moves to halt major acquisitions and mergers, and cutting the company's debt in a bid to rekindle investor confidence. It stock price is down 18 percent this year before today, and fell just over 1 percent at market opening in Madrid.

However, due to the massive Latin America market that the company still has, the losses were offset by a 17.5 percent rise in revenue in the region. The Latin American market now accounts for nearly half of the group's revenue, acting as a measured balancing act between the two core regions.

Telefonica holds a massive share of the Spanish and Latin America market, and holds a heavy presence in Europe and the UK.

The company also owns O2, a UK mobile company with a headquarters near London, which announced today that its total access base was 23 million customers at the end of September, up 2 percent year on year.

The eurozone's largest telecoms provider in terms of market value, and one of the largest broadband and phone providers in the world, had previously promised a dividend of 1.75 euros per share in 2012.

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