Telefónica

"Telefônica" redirects here. For Brazilian telecommunication company, see Telefônica Brasil.

For the yachts, see Telefónica Blue and Telefónica (yacht).

Telefónica, S.A.

Type	Sociedad Anónima
Traded as	BMAD: TEF NYSE: TEF LSE: TDE BVL: TEF BCBA: TEF
Predecessor	Compañía Telefónica Nacional de España (CTNE)
Founded	19 April 1924 (1924-04-19) (CTNE)
Headquarters	Madrid, Spain
Area served	Worldwide
Key people	César Alierta (Chairman and CEO)
Products	Fixed line and mobile telephony, Internet services, digital television
Revenue	€ 050.377 billion (2014)
Operating income	€ 06.967 billion (2014)
Profit	€ 003.252 billion (2014)
Total assets	€ 122.299 billion (2014)
Total equity	€ 030.289 billion (2014)
Number of employees	120,497 (average, 2014)
Subsidiaries	Telefónica España Telefónica Germany Telefónica Hispanoamérica / Telefónica Brasil Telefónica UK Terra
Website	www.telefonica.com

Telefónica, S.A. (Spanish pronunciation: [teleˈfonika]) is a Spanish broadband and telecommunications provider with operations in Europe, Asia, North America and South America. Operating globally, it is one of the largest telephone operators and mobile network providers in the world. The company is a component of the Euro Stoxx 50 stock market index.

The company started as a public telecommunications company. Its head office is in the Distrito Telefónica in Madrid. As well as the Telefónica brand, it also trades as O2, Vivo and Movistar.

History

Created in 1924 as Compañía Telefónica Nacional de España (CTNE), until the liberalisation of the telecom market in 1997, Telefónica was the only telephone operator in Spain and still holds a dominant position (over 75% in 2004). Since 1997, the Spanish government has privatised its interest in the company.

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. The two major stockholders include:

• Banco Bilbao Vizcaya Argentaria (BBVA): 6.893%
• CaixaBank ("La Caixa"): 5.442%

Current operations

File:Telefónica's global operations.png

A map highlighting Telefónica's global operations.

  Telefónica operating countries

  Telefónica's partners and affiliates

Europe

Germany

Main article: Telefónica Germany

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. 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.

Italy

Main article: Telecom Italia

Telefónica currently owns 46% of Telco, the holding company that controls 22% of Telecom Italia, Italy's former government–owned telephone company. In late 2013, 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 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.

Spain

New Telefónica's headquarters on Las Tablas in Madrid

Telefónica is the second largest corporation in Spain, behind the Santander Group. It owns Telefónica de España which is the largest fixed phone and ADSL operator in Spain, Telefónica Móviles, the largest mobile phone operator in Spain (under the Movistar brand), and Terra Networks, S.A., an Internet subsidiary.

United Kingdom

Main article: O2 (United Kingdom)

On 31 October 2005, O2 agreed to be taken over by Telefónica, with a cash offer of £17.7 billion, or £2 per share. 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.

France

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. In Mexico it occupies a distant second place and it is the largest in Chile, Venezuela, Brazil, and Peru.

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 Latin 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. 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 Brasil Telecom. Telefónica is the parent of Telefônica Vivo.

In 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. 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 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 25 October 2009, Telefónica Chile changed its name to Movistar, including cellphone, landline, satellite TV, and internet.

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). 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 on 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.

Ecuador

After acquiring 100% of OTECEL S.A. (Bellsouth), Telefónica Móviles Ecuador started its operations on 14 October 2004 as Movistar. It offers mobile solutions for the Ecuadorian market and is one of only three mobile operators in Ecuador. Telefónica in Ecuador has started offering 3G service from the second half of 2009.

Guatemala

After acquiring 100% of Paysandú S.A., Telefónica Guatemala Centro América started its operations in 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. It offers mobile solutions for the Guatemalan market and is one of only three mobile operators in Guatemala, international operator as Millicom (TIGO) and América Móvil (Claro). Telefónica Móviles Guatemala (renamed in 2005) offers services on UMTS/HSPA since June 2009, and it was the last operator to launch commercial services on this technology, with coverage in all major cities.

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 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 that they sold the Puerto Rico network to a private equity group who renamed it Open Mobile.

Venezuela

Telefónica offers EvDO-based Internet access at low rates from 2004 and owns movistar, the first and larger mobile operator of Venezuela, being in second place movilnet of CANTV (Government). Telefónica offers in Venezuela EvDO/1x and GSM GPRS networks and in December 2008 launched its UMTS network.

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, 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 $1Bn cross-holding with Telefónica. 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.

Former operations

Czech Republic

Main article: Telefónica Czech Republic

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 company was renamed to 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 will continue trading under the O2 brand for a maximum of four years.

Slovakia

Main article: Telefónica Slovakia

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.

Ireland

Main article: O2 (Ireland)

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. The company is due to be merged with 3 following completion of the sale.

Telefónica Multinational Solutions

The firm provides fixed and mobile telecommunications and IT services to large multinational corporations through its Telefónica Multinational Solutions unit.

Customers: Telefónica lists, among other, the following as existing customers: DPDHL, Inditex, Scottish Power, BBVA, BMW, Endesa and FCC.

Commercial and Operational offices with Network Infrastructure: Austria, Belgium, Bulgaria, Denmark, Estonia, France, Greece, Hungary, Brazil, Italy, Netherlands, Poland, Portugal, Romania, Sweden, Switzerland and USA

Network Points of Presence: Finland, Latvia, Lithuania, Norway and Slovenia

Strategic and Industry alliances: China, Italy, Chile and Portugal

Financial data

Financial data in millions of euro

Year	2001	2002	2003	2004	2005	2006	2007	2008
Sales	31 052	28 411	28 399	30 322	37 882	52 901	56 441	57 946
OIBDA	12 804	11 724	12 600	13 215	15 276	19 126	22 824	22 919
Net Results	2 106	-5 577	2 203	2 877	4 446	6 233	8 906	7 592
Net Debt	28 941	22 533	19 235	20 982	33 574	52 145

Source :OpesC Quarterly Report Jan - Dec 2008 - page 9

Corporate Reputation and Responsibility

In Telefónica, Corporate Reputation and Responsibility form part of the competencies of the Management of Public Issues and Regulation. This area is in charge of the development and management of the company’s intangibles, reports directly to the CEO and is represented on the Executive Committee.

To secure those issues inside the organization, they have a Committee of the Board of Directors. In fact, Telefónica was the first business of Ibex35 with this organization, created in June, 2002.

The Commission of Institutional Issues is composed of six members, and meets periodically whenever the council requests its intervention.

In Telefónica, the sustainability has a value perspective of with three main lines: activity growth, profitability increase, and risk management, by focusing on the quality, innovation, and productivity for creating a long-term competitive advantage.

This is translated into a series of key projects linked to the operation with sustainability criteria (economic, social, and environmental) 100% aligned with the mission of the company, to offer a responsible and transparent management. Some of the development initiatives are central in the protection of minors, the sustainability of supply chains, the privacy and liberty of expression, human rights in all their many facets and the management of opportunities related to the positive impact of our services on society and on the environment.

The sustainability actions of Telefónica are recognized by the most prestigious global sustainability indexes, like Dow Jones Sustainability Index (DJSI), Carbon Disclosure Project, (CDP), Sustainalytics, and Ethibel Sustainability Index (FTSE).

Sponsorship

O2 are the main sponsors of the England Rugby Team. In football, Teléfonica sponsors the Real Zaragoza and Valencia CF teams.

Within Formula One, Telefónica was a major sponsor of the Renault F1 Team until Fernando Alonso's departure to McLaren in 2007, and were title sponsors of the Spanish Grand Prix from 2006 to 2010. Through its acquisition of O₂, Telefónica also indirectly sponsored the BMW Sauber F1 Team. F1 Racing estimates these sponsorships amount to $18 million, $15 million and $23 million respectively.

They also sponsored the Ford Focus WRC during seasons 2000-2002 when Spanish rally driver Carlos Sainz drove for the team. The sponsorship said Telefónica Movistar on it and the stickers were on the front bumper, the rear 3-quarters and the rear spoiler. As Sainz moved to Citroën team, Telefónica followed and sponsored Citroën rally team in 2003.

Teléfonica was also a major sponsor of one of Suzuki's and Honda's racing teams in MotoGP in the early 2000s. They have, however, ceased sponsoring a motorcycle racing team in MotoGP.

From 2011, they are to sponsor the cycling team previously known as Caisse d'Epargne, under the name Team Movistar.

Monopoly

Europe

Telefónica's headquarters on Gran Vía in Madrid

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:

1. 900,000 euro fine, Spanish tribunals,

2. 18 million euro fine, Spanish Telecommunication Market commission, 57 million in 2004 for unfair competition, and,

3. 151.9 million euro by European Commission for abusing of its dominant position.

Now Telefónica has in court two more fines, with a value of 793 million euros.

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. 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. 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. This practice is considered by some to be used by Telefónica in certain areas of Spain where there are few broadband connections.

Positions on Network neutrality

Main article: Network neutrality

In February 2010, Telefónica CEO Cesar 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 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.

Investments and collaborations

Telefónica is a supporter of the Hybrid Broadcast Broadband TV (HbbTV) initiative (a consortium of broadcasting and Internet industry companies including SES, OpenTV, and Institut für Rundfunktechnik) 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.

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, and Cloudwear.

As of 1 December 2014, the Firefox web browser includes the Firefox Hello WebRTC feature, that allows real-time voice and video online chats. Firefox Hello is powered by Telefónica and was also co-developed by Telefónica.

Telefónica Dynamic services offers mobile-money using Sybase 365 Mobile wallet systems, with a service-centre based in Tel-Aviv.

See also

• Movistar
• List of telephone operating companies
• List of mobile network operators

External links

• Official website