As well as the Telefónica brand, it also trades as Movistar, O2, and Vivo. The company is a component of the Euro Stoxx 50stock market index.[4] On April 15, 2012, Telefónica shut down TVA and Ajacto, which unified the brand on the Vivo.
History
Telefónica's logo evolution since 1924 to 2021
The company was created in Madrid in 1924 as Compañía Telefónica Nacional de España (CTNE) with ITT as one of its major shareholders.[5] In 1945, the state acquired by law a share of 79.6% of the company. This stake was diluted by a capital increase in 1967.[6]
Until the liberalization of the telecom market in 1997, Telefónica was the only telephone operator in Spain.[7] It still holds a dominant position (over 75% in 2000).[8] Nowadays, Telefónica is present in more than 20 countries around Europe and America.
In 2023, Saudi Arabia's STC Group became Telefónica's largest shareholder, building a stake worth 2.1 billion euros ($2.23 billion) through shares and convertible financial instruments.[9] In December 2023, the Spanish government announced plans to acquire a stake of up to 10% in Telefónica worth $2.2 billion through the state holding company SEPI.[10]
Ownership
Telefónica is a 100% listed company with more than 1.5 million direct shareholders. Its share capital currently comprises 4.563.996.485 ordinary shares traded on the Spanish Stock Market (Madrid, Barcelona, Bilbao, and Valencia) and on those in London, New York, Lima, and Buenos Aires. Because Telefónica is considered a defense service provider and a strategic company, the Spanish government has a say in acquisitions and holdings between 5% and 10%.[11]
A map highlighting Telefónica's global operations.
Telefónica operating countries
Telefónica's partners and affiliates
Europe
Austria
In May 2022, Telefonica announced the acquisition of the European cloud-based services specialist and cloud Microsoft Dynamics partner BE-terna. The deal worth €350 million includes 1,000 staff, AI, extended service capabilities across Europe, and a cybersecurity services division. The deal aimed to see Telefonica increase its geographic scale and aid its digital capabilities.[16]
Telefónica is the second largest corporation in Spain, behind the Santander Group.[17] It operates under the movistar and O2 brands with the first being the largest broadband and phone (both mobile and landlines) provider in Spain.
Telefónica's FTTH network in Spain is the most extensive fibre-to-home network in Europe, as of April 2016,[18] and the shutdown plan for the legacy copper network is already in progress.[19]
Telefónica was the parent of Telefónica Deutschland, which held two alternative IP carriers. The two ISPs, mediaWays and HighwayOne merged in January 2003 after having been purchased by Telefónica in 2001 and February 2002 respectively.
On 26 January 2006 Telefónica completed its £17.7 billion (€25.7 billion) acquisition of the UK-based operator O2 which also provided mobile phone services in Germany under the O2 brand.[20] Following the purchase, Telefónica merged Telefónica Deutschland and O2 Germany to form the current business Telefónica Germany.
Telefónica Germany, purchased competitor E-Plus on 1 October 2014. As part of the purchase, Telefónica reduced its stake in its subsidiary to 62.1%. Integration continues as of August 2015, but the now merged network is Germany's largest in customers.
On 31 October 2005, O2 agreed to be taken over by Telefónica, with a cash offer of £17.7 billion, or £2 per share.[21] According to the merger announcement, O2, which provided mobile phone services in the UK, Ireland, Germany and the Isle of Man (uniquely to the O2 group Manx Telecom also offered fixed-line services), retained its name and continued to be based in the United Kingdom, keeping both the brand and the management team. The merger became unconditional on 23 January 2006 and O2 became a wholly owned subsidiary of Telefónica. Manx Telecom was sold by Telefónica Europe in June 2010.
In January 2015, Li Ka-shing entered into talks with Telefónica to buy O2 for around £10.25 billion, aiming to merge it with his subsidiary Three.[22] The acquisition was officially blocked by the European Commission on 11 May 2016, which argued that the merger would reduce consumer choice and lead to a higher cost of services[23] Telefónica began to seek a stock market flotation of the business instead.[24]
Announced on 7 May 2020, Liberty Global owner of Virgin Media and Telefónica owner of O2, agreed to merge their U.K. businesses in a deal worth £31bn and form one of the UK's largest entertainment and telecommunication companies to rival the BT Group.[25] As of the 1 June 2021, Virgin Media and O2 UK Ltd officially merged to form Virgin Media O2, giving Telefónica a 50% stake in the new company, with the other 50% owned by Liberty Global.[26]
In France, since 2011, Telefónica has a joint venture with the French telecommunications company Bouygues Telecom, part of the Bouygues group, to offer global telecommunication services packages to multinational companies. This cooperation was expanded in June 2015 through the creation of a separate joint venture company named Telefónica Global Solutions France, with its own marketing and sales teams offering Telefónica and Bouygues Telecom services packages to corporations.
Americas
Telefónica operates the Movistar mobile phone brand throughout Latin America and the Vivo in Brazil. In Mexico it occupies a distant second place and it is the largest in Chile, Venezuela, Brazil, and Peru. Telefónica plans to divest the majority of its Latin American business in order to focus on the core markets UK, Spain, Germany and Brazil and add €2 billion in revenue with this programme.[27]
Argentina
Telefónica owns Telefónica de Argentina which is the largest fixed-line operator in the country. It provides broadband, local and long-distance telephone services in southern part of the country as well as the Greater Buenos Aires area. The Telefónica Group has been in the country since 1990. The mobile business is run by Telefónica Móviles through Movistar, a local subsidiary.
Brazil
Telefónica's largest fixed-line operation in South America is in Brazil, where it provides broadband, local and long-distance telephone services in the aforementioned state, which alone represents the highest GDP of South America. It also owns a majority stake in the Brazilian mobile operator Vivo, having agreed on 28 July 2010 to buy Portugal Telecom's stake in the firm for €7.5 billion, after increasing its original offer by €1.8 billion over three months of incident-rich negotiations.[28] The Telefónica group has been in the country since 1996 when it acquired CRT, a fixed-line and mobile operator in the southern part of the country. The landline division is currently part of Oi. In July 1998 acquired Telesp, the telephony operator of the Telebrás system in the state of São Paulo, forming Telefônica Brasil.[29]
In June 2009, after four big "blackouts" on Telefónica's broadband "Speedy", ANATEL ordered Telefónica to stop sales of its broadband service until improvements were made on the infrastructure to provide better-quality service.[30] After the release of sales of broadband internet in August 2009, ANATEL expects the company's service investments to keep on par with the sales. On 24 July 2010 Telefónica announced that the number of Speedy subscribers had exceeded three million people.
Chile
Telefónica owns Telefónica Chile, formerly CTC (Compañía de Telecomunicaciones de Chile, formerly known as Compañía de Teléfonos de Chile) which is the biggest fixed-line operator and internet service provider in the country. The Telefónica Group has been in the country since 1989. The mobile business is run by Telefónica Móviles through a local subsidiary. On 26 October 2009, Telefónica Chile changed its name to Movistar, including cellphone, landline, satellite TV, and internet.[31]
Colombia
On 18 April 2006, Telefónica's president Cesar Alierta signed an agreement with the Colombian government to buy 50% and one share of the state-owned communications company, Colombia Telecomunicaciones (TELECOM).[32] With this sale, Telefónica became the largest Colombian land-line operator, and also gained an important presence in the local, long-distance and broadband market. The mobile business is run by Telefónica Móviles through the brand movistar. It is unknown what will happen with their previous established subsidiary Telefónica Empresas, being most probable a merger with TELECOM. The company is now known as Telefónica - Telecom.
Costa Rica
Telefónica signed a contract for 15 years (extendable for 10 additional years) on 12 May 2011 with the government of Costa Rica. It started operations in 2011 under its Movistar branding.
Dominican Republic
In 2000, Telefónica acquired a 26.5% stake in Tricom when it purchased part of the shares Motorola had obtained in 1993.[33]
Ecuador
After acquiring 100% of OTECEL S.A. (Bellsouth), Telefónica Móviles Ecuador started its operations on 14 October 2004 as Movistar. It is one of only three mobile operators in Ecuador. Telefónica in Ecuador has started offering 3G service from the second half of 2009.
Panama
Telefónica started its operations in Panama in 2004 as Telefónica acquired 100% of Bellsouth Panama. Since then it has operated using the name Movistar for mobile services. It migrated from CDMA technology used by Bellsouth to GSM 850. It also offers 3G using UMTS 850 and UMTS 1900. In 2015 it launched LTE with coverage expanding in Panama City, Arraijan, Chorrera up to Buenaventura Beach.
Peru
The Telefónica Group has been in the country since 1994 and owns the largest fixed-line operator in the country. The local subsidiary offers local, long-distance, and broadband services nationwide. The mobile business is run by Telefónica Móviles through a local subsidiary. The mobile telephone business goes by the name Movistar and competes with major provider Claro. Their main offices are located in Santa Beatriz on Av. Arequipa 1155.
Since January 2011, Telefónica has operated in the market under the Movistar brand.
Puerto Rico
Telefónica in the U.S. territory of Puerto Rico has presence through Telefónica Empresas, Telefónica Larga Distancia - TLD, Telefónica International Wholesale Services - TIWS (formerly Emergia) and Atento. Telefónica Moviles, through its Movistar brand, had presence in Puerto Rico until mid-2007 but they sold the Puerto Rico network to a private equity group who renamed it Open Mobile.
Venezuela
In late 2004 Telefónica took over the operations of Telcel Bellsouth in Venezuela, the first and largest mobile operator in the South American country at the time. After re-branding as Movistar, its CDMA2000 EvDO was progressively replaced by a GSMUMTS 3G network. Telefónica is currently rolling out 4G LTE in the country.
United States
Based in Miami, Florida, Telefónica USA, Inc. provides services to U.S.-based multinational companies that have operations in Latin America and Europe. Telefónica USA also operates the KeyCenter™, a data center in Miami built to withstand category 5 hurricanes,[34] from where the company supports Business Continuity and IT services for Enterprise customers in South Florida.
Asia
China
In 2009, China Unicom agreed to a $1 billion cross-holding with Telefónica.[35] In January 2011, the two partners agreed to a further $500 million tie-up in each other. Following completion in late 2011, Telefónica will hold a 9.7% stake in China Unicom, and China Unicom will own 1.4% of the Spanish firm.[36]
In 2018, China Unicom and Telefónica establish a new partnership to combine their services and networks in the internet of things, so as to enable their clients to deploy IoT products and services in China, Europe and Latin America with a single global IoT SIM card.[37]
In 2005, Telefónica bought Český Telecom (Czech Telecom), the former state-owned Czech phone operator which still dominates the Czech fixed-line market. As part of this deal Telefónica also gained its 100% subsidiary Eurotel, one of three mobile phone operators in the Czech Republic. Starting 1 July 2006, both companies were merged into one legal entity and renamed Telefónica O2 Czech Republic. In 2011, the company was renamed Telefónica Czech Republic and in 2013, it was announced that Telefónica would sell its stake in the company to PPF. Under the terms of the sale, the company was allowed to continue to trade under the O2 brand for a maximum of four years.[38] In August 2017, the brand license agreement was extended to 2022, with a 5-year extension to 2027 available.[39]
During 2006, Telefónica won the tender to become the third mobile phone operator in Slovakia, under the O2 brand. It began providing services on 2 February 2007 under the name Telefónica O2 Slovakia, s.r.o. It initially launched providing only a prepaid service but in mid-2007 began to sell contract phones. The company was sold along with Telefónica Czech Republic to PPF.[38]
O2 in Ireland was purchased by Telefónica as part of its acquisition of O2 plc in the UK in 2005. Telefónica Ireland has become the second largest mobile phone operator in Ireland, operating a GSM/EDGE and high-speed HSPA+ wireless broadband network to residential and business customers through its "O2" brand. Telefónica Ireland also provide fixed broadband to business customers.
It was announced on 24 June 2013 that Telefónica had agreed to sell its O2 Ireland mobile business for at least €780 million ($1 billion) in cash to Hutchison Whampoa's subsidiary 3.[40] O2 was merged into Hutchison Whampoa's subsidiary Three Ireland in March 2015.
Telefónica currently owns 46% of Telco, the holding company that controls 22% of Telecom Italia, Italy's former government–owned telephone company. In late 2003, Telefónica announced its intention to acquire the entirety of Telco by January 2014, potentially becoming Telecom Italia's largest shareholder. The plan, was however challenged by the Brazilian competition authority since Telefónica and Telecom Italia, with Vivo and TIM Brasil respectively, are the two largest telephone companies competing in Brazil. Subsequently, Telefónica confirmed in September 2014 that it intended to sell its shares in Telecom Italia following the purchase of Global Village Telecom (GVT) in Brazil from Vivendi.[41] Telefónica sold its shares in the business to Vivendi as part of the sale of GVT in June 2015.[42]
Central and South America
After acquiring 100% of Paysandú S.A., Telefónica started its operations in Guatemala 1998 as Telefónica Movistar and just Telefónica for landlines. In 2004, acquired 100% of BellSouth Guatemala, relaunching mobile operations as movistar in 2005, with mobile services based on CDMA technology, in 2004 as Telefónica Movistar launch national service with GSM/GPRS technology, and CDMA 1x EV-DO for data. Telefónica Móviles Guatemala (renamed in 2005) offered services on UMTS/HSPA starting in June 2009, and it was the last operator to launch commercial services on this technology, with coverage in all major cities in Guatemala.
On 24 January 2019, América Móvil announced the that they will acquire both the Guatemalan and El Salvadoran operations of Telefónica for US$333 million and $315 million, respectively. The transaction would also acquire all Pay TV operations. The sale was eventually approved in Guatemala and would later become intergraded into Claro. However, the transaction for the El Salvadoran operations to be sold to América Móvil were scrapped due to regulatory hurdles.[43][44]
In February 2019, Millicom announced the purchase of the Panamanian, Costa Rican and Nicaraguan operations of Telefónica for US$1,650 Million, with plans to phase out the Movistar brand from those markets within a year after purchase. The transaction was completed in August the same year.[45] Telefónica had purchased the Panamanian, Ecuadorian and Guatemalan operations of BellSouth in 2004 for US$1665 Million, followed by a rebranding to Movistar in 2005. The purchase was intended to help Telefónica focus on its largest markets, alleviating its debt.[46][47][48][49]
In football, Teléfonica is an official sponsor for several national teams such as Spain (Movistar+) in Europe, and Brazil (vivo), Mexico, Colombia, Peru, or Venezuela in the Americas.
In the World Rally Championship, Telefónica sponsored the SEAT Sport WRC Team between 1998 and 2000, under both Movistar and Telefónica Movistar. Telefónica sponsored the Ford WRC Team in seasons 2000-2002 when Spanish rally driver Carlos Sainz drove for the team, and when Sainz moved to the Citroën WRC Team for 2003, Telefónica followed. The sponsorship was not continued into 2004, despite Sainz staying with the team.
In the 2000 CART season, PPI Motorsports raced the #96 Telefónica Toyota-Reynard, driven by Spanish rookie Oriol Servià.[50] Oriol finished 15th in the standings with a best result of 3rd, and failed to win Rookie of the Year. Teammate da Matta in the #97 Pioneer Toyota-Reynard performed better with 10th and 1 win, however the team retired from open-wheel racing at the end of the season, and the sponsorship ended.
Telefónica sponsors, through its Movistar brand, the "Movistar Riders" eSports team.[51]
Investments and collaborations
Telefónica is a supporter of the Hybrid Broadcast Broadband TV (HbbTV) initiative that is promoting and establishing an open European standard for hybrid set-top boxes for the reception of broadcast TV and broadband multimedia applications with a single user interface, and has run pilot HbbTV services in Spain.[52]
Telefónica's Wayra subsidiary first launched in Latin America and Spain in 2011 to provide seed investment and mentoring to new companies. Since its inception, Wayra has backed over 300 companies including Trustev, Venddo, Cloudwear[53] and NFWare.[54]
In September 2017, Nokia and Telefónica signed an agreement in order to evaluate technologies enabling an efficient network evolution to 5G in line with Telefónica's business objectives.[59][60]
Monopoly
This section needs to be updated. Please help update this article to reflect recent events or newly available information.(June 2016)
Telefónica has received several fines due to convictions over unfair competition, abuse of its position as dominant provider, and antitrust violations through the Commission of Telecommunications, European Commission, and Spanish tribunals. These fines include:
18 million euro fine, Spanish Telecommunication Market commission, 57 million in 2004 for unfair competition[62]
151.9 million euro by European Commission for abusing its dominant position[63][64]
As of 2008, Telefónica had in court two more fines, with a value of 793 million euros.[65]
On 5 July 2007, the European Commission ordered Telefónica to pay a record antitrust fine of almost €152 million for activities in the Spanish broadband market which, according to European Union competition commissioner Neelie Kroes, "harmed Spanish consumers, Spanish businesses and the Spanish economy as a whole, and by extension Europe's economy."
Several consumer groups in Spain have reported unnecessary delays in cancelling Telefónica's ADSL service. These consumer groups also claim that services continue to be billed after being cancelled and that service cancellation requests are ignored.[66]
This has led Spanish people to organize themselves in consumer groups such as the "Asociación de Internautas" and user communities like "Bandaancha" in order to defend themselves from Telefónica's abuses and to give support and help to each other in their various complaints about Telefónica's unfair practices.
The practices are claimed to include the complex process involved in cancelling lines.[67]
These line cancellation procedures are justified by Telefónica as a way of "defending customers against hoaxes." Furthermore, in areas where ADSL lines are scarce, there are also reports of customers who claim to have had their service cancelled or inexplicably transferred to another customer although they have paid their bills.[68]
This practice is considered by some to be used by Telefónica in certain areas of Spain where there are few broadband connections.
In February 2010, Telefónica CEOCesar Alierta expressed in a meeting at Bilbao, Spain that his company intends to charge Google and other search engines for the use of their network. Alierta[69] complained that such search engines were benefiting from the platform without contributing to the company's expenses and that such a trend will change in the near future. Additionally, he said that Telefónica will seek to push its own content.[70]
Innovation
In 2017, Telefónica announced the launch of OnLife Networks, intended to infuse innovation into the company.[71]
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