TiVo To Help ONO Challenge Telefónica

Spain's leading alternative wireline operator ONO announced its Q411 results, reporting impressive growth in revenue and EBITDA in 2011. However, its profit margin has remained thin due to the large investment burden from its technological upgrade, including the roll-out of TiVo services and the completion of the DOCSIS3.0 roll-out. BMI expects ONO to benefit operationally from these investments in high quality infrastructure over the medium term, giving it a clear advantage over the incumbent Telefónica at the higher end of the market. However we caution that economic conditions and the shift to mobile services in Spain may exert downward pressure on prices, continuing to limit profitability.

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