Spanish telecoms giant Telefónica saw its sales plunge in the first quarter due to the end of roaming charges in Europe, but still posted a 7.4 percent rise in net profit.
The group's turnover dropped 7.2 percent to 12.2 billion euros (US$14.9 billion) due to the "negative impact of regulation" according to a statement, referring to the end of roaming charges in Europe in June 2017.
Without this, turnover would have risen 3.1 percent year-on-year thanks in part to the sale of handsets, the group said.
Net profit stood at 837 million euros, above analyst expectations. Shares rose 1.3 percent in early morning trading.
The company said it also suffered from the depreciation of the Brazilian real and the Argentine peso – two important markets for the firm – against the euro.
But Telefónica's strategy of prioritising higher value services appeared to have borne fruit in the first quarter.
The number of clients subscribing to 4G rose by over a third year-on-year, those using faster fibre-cable for their internet increased by 20 percent and people getting pay television by five percent.
Net financial debt, the group's black cloud, dropped to 43.9 billion euros from 44.2 billion end December.
Telefónica Argentina reported first-quarter revenues of 755 million euros, up 24.9 percent year on year, industry reports said this week, pointing to a rise in customers migrating to higher-value plans and consumer more data. Data revenues for the Argentina market were up 38.6 percent year on year.
According to reports earlier in the month from Bloomberg, the Spanish firm has "hired banks to sell shares of its Argentine unit through initial public offerings in Buenos Aires and New York," citing sources with knowledge of the plan.
The company hired Bank of America Merrill Lynch and Morgan Stanley to organize the share sale, a move that would help raise funds for investment and cut debt, said the people, who asked not to be identified as the plans are private. The IPO, which would raise between US$500 million and US$1 billion, will most likely happen in the second half of the year, Bloomberg reported.