1Q16 Results: Telefonica Brasil S.A.

SAO PAULO, April 27, 2016 /PRNewswire/ -- Telefonica Brasil - (Bovespa: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its 1Q16 results. In the first quarter of 2016, Vivo achieved strong EBITDA expansion and robust cash flow generation through sustained revenue growth, efficiency and synergies capturing.

R$ million	1Q16	% y-o-y
Net Operating Revenues	10,431.4	0.6
Net mobile revenues	6,212.9	(0.3)
Net fixed revenues	4,218.5	2.0
Operating costs	(6,642.9)	(9.0)
Recurring Operating costs*	(7,156.4)	(2.0)
EBITDA	3,788.5	23.8
EBITDA Margin %	36.3%	6.8 p.p.
Recurring EBITDA*	3,275.0	7.0
Recurring EBITDA Margin %*	31.4%	1.9 p.p.
Net income	1,218.2	179.3
Number of accesses (thousand)	97,220	(8.1)
Mobile accesses	73,271	(10.5)
Fixed accesses	23,950	0.3

(*) Adjusted by the towers sale in 1Q16 in the amount of R$ 513.5 million

Leadership in the postpaid segment, with continuous growth (+8.1% y-o-y in 1Q16) and share of net additions of 41% until February 2016. Postpaid market share came to 42.4% in February. Mobile ARPU recorded y-o-y growth of 10.9% in 1Q16, driven by the solid 35.7% y-o-y growth in Data ARPU, which already represented 52% of total ARPU.

Resilient growth in fixed accesses: Broadband accesses reached 7.2 million in 1Q16, while FTTx* connections reached 54.2% of the base in 1Q16, with annual growth of 12.6%. Pay TV accesses totaled 1.8 million in 1Q16, 4.9% up y-o-y, with strong increase in premium accesses (IPTV and Interactive DTH).

Net operating service revenue grew 1.0% y-o-y in 1Q16, maintaining a positive performance despite the challenging macroeconomic environment and affected by regulatory effects.

Net mobile service revenue increased by 0.4% y-o-y in 1Q16. Excluding the effect of MTR reductions in 2015 and 2016, this line increased 2.9% over 1Q15.

Mobile Data and VAS revenue grew 22.8% y-o-y in 1Q16, fueled by the strong upturn in mobile internet revenue, of 35.4% over 1Q15.

Net fixed revenue posted y-o-y growth of 2.0% in 1Q16. Excluding the reduction in fixed-mobile regulated tariffs (VC, TU-RL and TU-RIU), this increase came to 5.1% in 1Q16 over 1Q15.

Operating costs fell by 9.0% y-o-y in 1Q16. Adjusted by the sale of towers, operating costs declined 2.0%, reflecting the Company's focus on efficiency and the capturing of synergies.

EBITDA totaled R$ 3.8 billion in 1Q16, accompanied by an EBITDA Margin of 36.3%. Adjusted for the sale of towers recurring EBITDA amounted to R$3.3 billion in the quarter, with a recurring EBITDA Margin of 31.4% achieving the highest growth in the last 5 quarters: 7% y-o-y.

1Q16 investments totaled R$1.5 billion, accounting for 14.3% of net operating revenue.

EBITDA – CAPEX achieved accelerated growth of 37% y-o-y in 1Q16 with a strong evolution in Free Cash Flow in 1Q16.

Successful execution of key projects during April/16 (one only brand and legal entity, launch of national 3P portfolio and 4P pilot) and value capture of synergies in 1Q16 in line with expectations.

TELEFONICA BRASIL – Investor Relations
Amos Genish
David Melcon
Luis Plaster
Maria Tereza Pelicano David
[phone] / [e-mail]

To download the complete version of the Company's earnings release, please visit our website: http://www.telefonica.com.br/ir

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/1q16-results-telefonica-brasil-sa-300258929.html

SOURCE Telefonica Brasil S.A.

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