Telefónica

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"Telefônica" redirects here. For Brazilian telecommunication company, see Telefônica Brasil.
Telefónica, S.A.
Type Sociedad Anónima
Traded as BMADTEF
NYSETEF
LSETDE
BVLTEF
BCBA: TEF
Industry Telecommunications
Predecessor(s) 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 Decrease  062.356 billion (2012)[1]
Operating income Increase € 010.798 billion (2012)[1]
Profit Decrease € 004.403 billion (2012)[1]
Total assets Increase € 129.773 billion (2012)[1]
Total equity Increase € 027.661 billion (2012)[1]
Employees 272,598 (average, 2012)[1]
Subsidiaries Telefónica España
Telefónica Europe
Telefónica Hispanoamérica / Telefónica Brasil
Terra
Website 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 the sixth-largest mobile network provider in the world. The company started as a public telecommunications company. Its head office is in the Distrito Telefónica in Madrid.[2][3]

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.[4]

History[edit]

Created in 1924 as Compañía Telefónica Nacional de España (CTNE), until the liberalisation of the telecom market in 1997,[5] Telefónica was the only telephone operator in Spain and still holds a dominant position (over 75% in 2004).[6] Since 1997, the Spanish government has privatised its interest in the company.

Current operations[edit]

A map highlighting Telefónica's global operations.
  Telefónica operating countries
  Telefónica's partners and affiliates

Europe[edit]

The logo of O2, which Telefónica operates as in most of Europe.

Telefónica Europe is the parent company for most of Telefónica's European holdings.

Czech Republic[edit]

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 will sell its stake in company to PPF and company will continue to use the O2 brand for a maximum of four years.[7]

Germany[edit]

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 (O2 Germany).[8]

Since its acquisition of O2, Telefónica have merged their German operations (Telefónica Deutschland and O2 Germany) into the single business Telefónica Germany.

Ireland[edit]

Main article: Telefónica Ireland

On 31 October 2005 (2005-10-31), it was announced that Telefónica had begun proceedings to take over O2 Ireland's parent company, O2 plc. The takeover was approved by shareholders. In Ireland, Telefónica is the 2nd largest mobile phone operator, 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 Monday 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 local unit 3 Ireland.[9]

Italy[edit]

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, however, is being 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.

Slovakia[edit]

Main article: Telefónica Slovakia

In summer of 2006, Telefónica won the tender to be the 3rd mobile phone operator in Slovakia, under the brand O2. It began providing services on 2 February 2007 under the name Telefónica O2 Slovakia, s.r.o. In the beginning, it only provided a prepaid service but in Q2 of 2007, it started selling contract phones. The company will be sold alongside with Telefónica Czech Republic to PPF.[7]

Spain[edit]

New Telefónica's headquarters on Las Tablas in Madrid

Telefónica is the second largest corporation in Spain, behind Grupo Santander.[10] 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[edit]

Main article: O2 (United Kingdom)

On 31 October 2005 (2005-10-31), O2 agreed to be taken over by Telefónica, with a cash offer of £17.7 billion, or £2 per share.[11] 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 (2006-01-23). O2 is now a wholly owned subsidiary of Telefónica. Manx Telecom was sold by Telefónica Europe in June 2010.

Americas[edit]

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. See movistar article for a complete country list.

Argentina[edit]

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[edit]

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.[12] 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 ǀ 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.[13] 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[edit]

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.[14]

Colombia[edit]

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).[15] 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. Now the company is known as Telefónica - Telecom.

Costa Rica[edit]

Telefónica signed a contract for 15 years (extendable for 10 additional years) on 12 May 2011 with the government of Costa Rica. It is expected to start operations on 2011 under its Movistar branding.

Dominican Republic[edit]

In 2000, Telefónica acquired a 26.5% stake in Tricom when it purchased part of the shares Motorola had obtained in 1993.[16]

Ecuador[edit]

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[edit]

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[edit]

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. The company also offers land lines.

Peru[edit]

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.

Starting January 2011, Telefónica operates in the market under the Movistar brand.

Puerto Rico[edit]

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[edit]

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).[citation needed] Telefónica offers in Venezuela EvDO/1x and GSM GPRS networks and in December 2008 launched its UMTS network.[citation needed]

United States[edit]

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 Key Center, a category 5 data center in Miami, from where the company supports Business Continuity and IT services for Enterprise customers in South Florida.

Asia[edit]

China[edit]

In 2009, China Unicom agreed to a $1Bn cross-holding with Telefónica.[17] 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.[18]

Telefónica Multinational Solutions[edit]

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.

Full Network Operations: Argentina, Brazil, Chile, Colombia, Czech Republic, Ecuador, El Salvador, Germany, Guatemala, Ireland, Mexico, Nicaragua, Panama, Peru, Puerto Rico, Slovakia, Spain, United Kingdom, Uruguay and Venezuela

Commercial and Operational offices with Network Infrastructure: Austria, Belgium, Bulgaria, Denmark, Estonia, France, Greece, Hungary, 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 and Portugal

Financial data[edit]

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

Ownership[edit]

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. Major stockholders include:

In addition to this, the company held 75% of Dutch TV firm Endemol in shares, although these have been sold in May 2007 to Edam Acquisition, jointly and equally owned by Cyrte Fund II B.V.; Mediacinco Cartera S.L., which is a newly incorporated entity owned by Mediaset S.p.A. and its quoted subsidiary Gestevision Telecinco S.A.; and GS Capital Partners.

Corporate Reputation and Responsibility[edit]

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.[19]

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.

Institutional Affairs Committee Committee Members:

   D. Julio Linares López *
   D. Fernando de Almansa Moreno-Barreda
   D. Alfonso Ferrari Herrero
   D. Gonzalo Hinojosa Fernández de Angulo
   D. Antonio Massanell Lavilla
   D. Javier de Paz Mancho
   *Commission President

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.[20]

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[edit]

O2 are the main sponsors of the England Rugby Team. Telefónica was a major sponsor of the Renault F1 Team until Fernando Alonso's departure to McLaren Mercedes F1 Team and Formula 1 Gran Premio De España Telefónica. Through its acquisition of O2, Telefónica also indirectly sponsored the BMW Sauber. F1 Racing estimates these sponsorships amount to $18 million, $15 million and $23 million respectively. In Ireland, O2 are the main sponsors of the Irish Rugby Union Team.

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 also sponsors the Spanish football teams Real Zaragoza and Valencia CF.

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[edit]

Europe[edit]

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: 900,000 euro fine, Spanish tribunals,[21] 18 million euro fine, Spanish Telecommunication Market commission, 57 million in 2004 for unfair competition,[22] and 151.9 million euro by European Commission for abusing of its dominant position.[23][24] Now Telefónica has in court two more fines, with a value of 793 million euros.[25]

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.[26] 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.[27] 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.[28] 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[edit]

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[29] 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.[30]

External Investments[edit]

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.[31]

References[edit]

  1. ^ a b c d e f "Annual Results 2012". Telefónica. Retrieved 8 August 2013. 
  2. ^ "How to get to Distrito Telefónica."
  3. ^ "Contact Us." Telefónica. Retrieved 24 January 2012. "Telefónica, S.A. Shareholders Office Distrito Telefónica - Oeste 2, C/ Ronda de la Comunicación s/n 28050 Madrid" and "Distrito Telefónica - Edificio Central Pl 2ª C/Ronda de la Comunicación s/n 28050 Madrid"
  4. ^ David Del Valle. "Spain selects HbbTV standard". Advanced Television 25 November 2011. Retrieved 27 March 2012
  5. ^ Garcia Algarra, Javier (2010). "The American influence in Telefónica's public relations strategy during the 20's and 30's", IEEE HISTELCON 2010
  6. ^ "Press conference on Telefónica decision – introductory remarks" (Press release). European Commissioner for Competition Policy. 4 July 2007. Retrieved 18 February 2008. 
  7. ^ a b Telefónica Agrees the Sale of Telefónica Czech Republic to PPF for 2,467 mln euros
  8. ^ Newman, Matthew (10 January 2006). "Telefonica Wins Conditional EU Approval for O2 Bid". Bloomberg. Retrieved 23 July 2013. 
  9. ^ "Telefonica sells O2 Ireland to Hutchison's 3 for $1 billion". Reuters monday 24th June 2013.
  10. ^ Spanish companies in Fortune Global 500 ranking.
  11. ^ "Telefonica bids £18 billion for U.K.'s O2". BBC News. 31 October 2005. Retrieved 25 April 2010. 
  12. ^ Minder, Raphael (28 July 2010). "Telefónica Wins Full Control of Brazil Phone Venture". The New York Times. Retrieved 31 July 2010. 
  13. ^ Oglobo.oglobo.com[dead link]
  14. ^ "Movistar.cl". Movistar.cl. Retrieved 2013-10-12. 
  15. ^ 12 Octubre 2013. 18:01. "César Alierta: Telefónica es el aliado "ideal"". El Librepensador. Retrieved 2013-10-12. 
  16. ^ DR1. 12 October 2000. Tricom sells 26.5% of its shares to Telefónica de España
  17. ^ China Unicom and Telefónica Enter into a Broad Strategic Alliance and a Mutual Investment Agreement. 7 September 2009.
  18. ^ "Telefónica and China Unicom strengthen ties". BBC News. 23 January 2011. Retrieved 23 January 2011. 
  19. ^ "Organisation". Telefónica. 
  20. ^ "Strategy". Telefónica. 
  21. ^ "Confirman la multa de 900.000 euros a Telefónica por una denuncia de la Asociación de Internautas" (in Spanish). Retrieved 18 February 2008. 
  22. ^ "Competencia multa a Telefónica con 57 millones por abuso de posición dominante - elmundo.es economía" (in Spanish). Retrieved 18 February 2008. 
  23. ^ urwqeqwenbhewqt6qh171 "Bruselas multa a Telefónica con 151,8 millones de euros por impedir la competencia en ADSL". elmundo.es (in Spanish). Retrieved 18 February 2008. 
  24. ^ "Telefónica Profit Doubles; Annual Forecasts Raised (Update5)". Bloomberg.com. 30 July 2007. Retrieved 18 February 2008. 
  25. ^ "Jazztel presenta dos nuevas demandas contra Telefónica por 793 millones". ADSL 4 EVER.COM (in Spanish). Retrieved 18 February 2008. 
  26. ^ "Telefónica ADSL - Opinión - Un timo, una estafa, un robo, una mentira". Ciao.es. Retrieved 2013-10-12. 
  27. ^ "Baja en Terra y Telefónica con Burofax completo (con plantilla) - Telefónica - Foros". BandaAncha.st. Retrieved 2013-10-12. 
  28. ^ "Gestionando el conocimiento". Orcero.org. Retrieved 2013-10-12. 
  29. ^ ABC / madrid (2010-10-04). "César Alierta, entre los cinco ejecutivos más influyentes del mundo". ABC.es. Retrieved 2013-10-12. 
  30. ^ "Telefónica's CEO to charge Google". Eitb.com. Retrieved 2013-10-12. 
  31. ^ Wayra Funding List, Retrieved April 23, 2014

Further reading[edit]

External links[edit]