Marc Murtra, just ratified As executive president of Telefónica with a support of 90% of shareholders, they have a forceful message: the priority is “Europe, Europe and Europe”, and the consolidation within each country is essential. He already anticipated it In an inaugural speech of the MWC full of intention. The “intramerous” mergers are, in their opinion, the only effective way to generate real synergies, reduce costs and improve profitability in a sector that has languished for years. While Abandon Latin America After a ruinous business attempt there, Murtra focuses on operators such as Vodafone Spain and Digi, according to Expansionwith sufficient scale to impact. Why is it important. Murtra’s message to the European Commission, the CNMC and national governments is clear: mergers within each country are priority over any paneurpea consolidation, and regulators must allow them. This approach is a change with respect to the previous position of the EC, which has hindered similar mergers in the last decade. Orange and MasMóvilwithout going any further, he lasted a lot and filled with asterisks. However, recent letta and draghi reports on European strategic autonomy give intellectual coverage to this position. Murtra relies on the new geopolitical climate, where European technological sovereignty is at staketo claim conditions that allow European telecos to gain financial muscle and compete globally. The contrast. While in Europe it seeks to grow absorbing competitors, in Latin America Telefónica is in full withdrawal, after years of negative results that have undermined their financial position. Peru is already in creditors. Argentina has been sold for 1,190 million euros to the Clarín group (although Milei’s government tries to block the operation). Colombia is about to go to Millicom. And Mexico is the following in the list for divestment. Only Brazil remains as a strategic market, contributing about a third of the group’s profitability and being even more priority than Spain in terms of investment. What’s happening. The European consolidation strategy proposed by Murtra reflects a reality of the sector: Europe has 34 main operators for 450 million people, while the United States has only three for 335 million. This fragmentation is a lifeline. The European Telecommunications Sector has lost 41% of its capitalization since 2015while American and Asian giants advance technologically much faster. Telefónica’s stock market value fell 57% under the Álvarez-Pallete mandate despite reducing debt by half. The European 5G coverage (81%) is delayed with respect to the American and China (more than 95%). The average income per mobile customer in Europe is 15 euros compared to $ 42 in the United States. Fiber customer yield is 13 euros in Europe against $ 58 in the United States. Between the lines. Vodafone Spain and Digi arise as the logical objectives for consolidation in Spain. Only these operators have enough scale to generate multimillionaire synergies. Vodafone, with almost three million broadband customers, or Digi, who already exceeds two million fiber users, represent acquisitions with the necessary volume to move the needle in the Spanish market and contain the competition that is eroding its margins. Other assets such as Avatel, FI Network or Adamo would also be intent, but have too small dimensions for their purchase to have the impact that Telefónica seeks. Yes, but. Telefónica’s transformation goes beyond traditional consolidation. 43% of their business income in key markets already come from services that are not communications. The operator is close to the inflection point where most of your billing comes from technological servicesnot voice or data. The IT segment is growing “in double digit” while reducing the investment ratio on income from 12.9% to 12.5%. This metamorphosis reflects the search for a post-terocommunications identity, where Telefónica wants to be defined as a diversified technological company. Now the crystallize narrative is missing. And now what. Murtra has announced that he will present his strategic plan before he finishes 2025, with three priorities: focus on Europe, “iron financial discipline” and technological excellence. What remains to be seen is whether the European Commission, with The new Teresa Ribera Commissionerwill respond favorably to its requests with greater consolidation. And if Murtra will execute both Latin American divestments and European acquisitions with the rapidity it promises. If it works, it could mark the way for other European telecos trapped among American technological giants and Asian manufacturers. If it fails, the decline of the sector in Europe could become irreversible. In Xataka | Telefónica’s new guard: Marc Murtra and Emilio Gayo, the pair that seeks to create a European champion Outstanding image | Telefónica
