Your future is no longer in communications

Telefónica is about to complete a historical transformation that completely changes the nature of your business, as published by Expansion After the first public intervention of his new CEO, Emilio Gayo, in the great Catalunya Expansion meeting.

The current situation. 43% of Telefónica’s business income in its four main markets (Spain, Germany, the United Kingdom and Brazil) already comes from services that are not communications.

Why is it important. This silent transformation shows how the one that was a simple telephone operator is leaving its traditional business behind to become a diversified technological company.

Telefónica is close to that turning point where more than half of its business billing will come from technological services, not voice or data. Right where I wanted to be.

In detail. The IT technology segment is growing “in double digit” according to Gayo, while the traditional telecommunications business has already exceeded its peak of investment in infrastructure such as fiber and 5g.

• The investment ratio on income (capex) will go from 12.9% in 2024 to no more than 12.5% ​​in 2025.
• This reduction does not mean less investment, but greater efficiency and adjustment to real needs.

The general panoramic. Telefónica seeks to redefine itself as a “tractor company” at European level, betting on two parallel strategies:

1. Consolidation in key markets (Spain, Germany and the United Kingdom) where “will study any option that is raised.”
2. Accelerated growth in non -traditional technological businesses grouped in Telefónica Tech.

The contrast. While in Europe the operator is committed to growing and consolidating, in Latin America (Chile, Ecuador, Mexico, Uruguay and Venezuela) will continue releasing ballast ballast that does not stop causing losses and erode their margins. Only Brazil is a big business for Telefónica in the American continent.

The transformation began in 2019 and the results are already visible. In Spain he has closed 2024 “with figures that we did not see since 2018” (precisely a merit of Gayo before his new promotion), growing in all parameters. In the United Kingdom, he has generated “the expected synergies 18 months before the committed.”

And now what. The question is whether Telefónica will complete this metamorphosis without losing positioning in your traditional business. Gayo has pointed out that Movistar Plus remains “a key lever” for the residential segment, letting read between lines that will not completely abandon its roots while reinvesting.

The success of this strategy could mark the way to other European operators trapped between American technological giants and Asian manufacturers.

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