February 21, 2018 / 12:08 PM / a year ago

UPDATE 1-Telefonica Brasil hits profit forecasts amid high-end push

(Adds information throughout on revenue per user, data growth, EBITDA)

By Gram Slattery

SAO PAULO, Feb 21 (Reuters) - Telefonica Brasil SA , the country's largest telecommunications firm, met fourth-quarter profit forecasts on Wednesday as the company continued to increase its reliance on higher-end mobile and data offerings.

In a securities filing, the Brazilian unit of Spain's Telefonica SA reported net income of 1.517 billion reais ($466 million), up 25 percent from a year earlier.

While that was slightly below a Reuters consensus estimate of 1.61 billion reais, recurring net income - which the company said corrects for one-off expenses like regulatory provisions - came in at 1.63 billion reais.

In recent quarters, Vivo, as the carrier is branded locally, has emphasized increasingly high-end products that offer relatively high revenue per user, while phasing out often cheaper technologies such as pay-as-you-go pre-paid plans.

The fourth quarter was no exception, as post-paid connections climbed 10.1 percent from a year-ago, while pre-paid plans fell 5.5 percent. Average revenue per user in the company's data segment, which Vivo and its main competitors are currently expanding, climbed 23 percent in annual terms.

The company also maintained a lid on operational costs, which were essentially steady from a year before.

Earnings before interest, taxes, depreciation, and amortization in the period (EBITDA) came in at 3.767 billion reais. While that was a slight miss from the Reuters consensus estimate of 3.90 billion reais, Vivo posted a non-recurring EBITDA stripped of various one-off costs of 3.94 billion.

$1 = 3.25 reais Reporting by Gram Slattery; Editing by Matthew Mpoke Bigg

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