European heavyweight carrier Telefonica delivered a solid set of financials on Wednesday, recording a 9.8 per cent increase in net profit for the first quarter to €1.69bn.

Reported revenue fell 1. 4 per cent year on year to €13.7bn, largely as a result of currency fluctuations, with Latin America still driving the group’s growth as organic revenue in the region climbed 8.7 per cent. In Europe, organic revenue grew 4 per cent, driven by 7 per cent growth at O2 in the UK and 3.6 per cent growth in Germany.

The company’s total number of subscribers hit 261 million at the end of the quarter, consisting of 198 million wireless subscribers, following 2.4 million net adds in the first three months of 2009. Again, Latin America was the main growth driver.

Retail fixed-line broadband access connections stood at 12.8 million, a year on year increase of 17.5 per cent, driven by the growing adoption of voice, ADSL and pay-TV bundled offers. Telefonica said that in its domestic market of Spain over 86 per cent of retail broadband access connections are bundled as part of some kind of dual- or triple-play offers, while in Latin America, 51 per cent of broadband access connections are bundled as part of a dual- or triple-play package.

Pay TV subscribers hit 2.3 million by the end of March, almost 25 per cent more than a year ago. The company has pay TV operations running in Spain, the Czech Republic, Peru, Chile, Colombia, Brazil and Venezuela.

European telecoms analyst and sector strategist at Daiwa Securities, Michael Kovacocy, said of the results that, “In what may turn out to be one of the toughest quarters of the credit crunch, Telefonica has shown impressive stability through its unparalleled operational diversification. Latin America continues to drive growth forward and has truly become the company’s crown jewel. Whilst management continues to drive peer leading cost-control, we are particularly impressed by its ability to expand margins in Latin America.”