Reasons To Invest


Backed by the optionality of €105bn in assets and operations serving more than 345m total customer accesses, business growth, operational execution and debt reduction continue to be the main drivers of value creation at Telefónica.

We are making significant, sustainable progress to reduce debt, supported by solid free cash flow generation as well as asset optimisation and monetisation.

In parallel, we are growing and retaining our core base of high value customers by improving customer experience and leveraging our best-in-class networks across the Group, while unlocking the significant incremental growth and value creation potential in our Tech and Infrastructure businesses.

Our investment case reflects the five pillars of our strategy:

  1. Our attractive core businesses in Spain, Germany, UK and Brazil are a platform for sustainable growth and value creation
    • We are well positioned in our large, attractive markets with the scale, best-in-class networks and high-value customer services and strategies in each to capture and monetise ever rising demand for data and connectivity, improving our operating leverage over time
      • 209m retail accesses plus 13m wholesale accesses
      • 15m retail fixed broadband accesses of which 8m (55%) are FTTH (+9.8 p. p. y-o-y)
      • 41m FTTH homes passed (+20% y-o-y)
      • 166.1m retail mobile accesses, 51% contract
      • 95% LTE mobile network coverage (+2.7 p.p. y-o-y)
      • 5G networks launched in all 4 core markets, rollout supported by #1 FTTH position in Europe and Brazil
    • These businesses are, or are well on their way to being, our free cash flow and capital generation engines. Our operations are well invested with CapEx spend either largely complete or well covered by cashflows OIBDA-CapEx CapEx OIBDA OIBDA Mg OIBDA-CapEx - ingresos
    • They are our conduits for value optimisation:
      • Enabling a balanced finance strategy, allowing for further investment in profitable growth or return of cash to shareholders through our dividend policy
      • Driving continued organic de-leveraging, supported by announced inorganic initiatives that will reduce net financial debt by a further €9bn (c. 25% of year-end 2020 net debt of €35.2bn). Net Debt
  2. Our growing global Tech and Infrastructure businesses are building the world of tomorrow
    • Through Telefónica Tech, we have created separate operating businesses in Cybersecurity, Cloud services and in IoT & Big Data, providing an optimised platform for expansion in these attractive, high growth sectors. The carve-outs are almost complete, and the subsidiaries are now fully functional. Each of these businesses continues to develop at pace:
      • The Cloud computing and storage portfolio has been reinforced with the launch of the Virtual Data Centre service based on Edge Computing in Spain, to enable the large-scale data processing, low latency and real-time decision-making required in implementing 5G services.
      • The IoT and Big Data business continues to build its solutions capabilities for the Group’s corporate clients across a broad range of industries, with technological projects, pilot testing and partnerships announced in vertical sectors including Industrial IoT and Smart Agriculture.
      • In Cybersecurity, a new initiative to develop professional skills was launched in Spain, improving competence in digital security. The Company has also announced the creation of Telefónica Tech Ventures, a venture capital vehicle for investing in best in class growth cybersecurity start-ups worldwide.
    • Telefonica Tech is already Telefonica’s fastest growing business, delivering revenues of €1,504m in 2020, up 13.6% y-o-y. Looking ahead, it aims to accelerate existing revenue growth and increase optionality.
    • Telefónica Infra acts as a portfolio manager, owning and managing stakes in telecom infrastructure vehicles, alongside financial investors. Its objectives include crystallising the value of Telefónica's infrastructure assets and capabilities, improving core business units’ competitive position and capturing future value upside through the stakes held in infrastructure vehicles.
      • In January 2021, Telefónica Infra announced an agreement with ATC for the sale of Telxius' towers division in Europe and in Latin America for a cash consideration of €7.7bn, generating a capital gain for the Group of approximately €3.5bn and a €4.6bn reduction in net financial debt. The sale of the Telxius tower assets optimises the financial flexibility for the Group, whilst maintaining the strategic long-term partnership agreed with ATC.
      • In addition, T. Infra has focused on pursuing value creation opportunities in FTTH deployment with its agreement signed with Allianz in October 2020 to create an open-access wholesale operator in Germany to deploy fibre in underserved and semi-rural areas, tapping the potential of Europe’s largest broadband market. The company, co-controlled by Allianz and Telefónica in equal stakes, aims to reach more than 2m premises passed, creating a fibre network of over 50,000 km.
      • In Brazil, to capitalise on opportunities in the fibre market and reducing time to market, Telefónica has created an independent, neutral fibre network vehicle FiBrasil, owned by our Vivo business (25%), T. Infra (25%) and CDPQ (50%), to reach 5.5m premises passed in four years (including 1.6m premises passed contributed by Vivo). In parallel, Vivo continues to deploy its own resources to expand its fibre footprint in additional regions where we see further potential returns through capital-light partnership and franchise models which also reduce time to market.
    • Looking ahead, T. Infra will continue to crystallise the value of its infrastructure assets and expertise, capturing value from future infrastructure assets and co-investments.
  3. Our non-core Hispam portfolio is increasingly self-sufficient with legal separation completed
    • We are optimising our attractive national market operations for collective or individual divestment, spin off or other M&A alternatives to streamline our structure and core market focus, reduce our regional exposure and contribute to Group de-leveraging
  4. Our simplified, streamlined and digital operating model is driving better efficiency
    • We are implementing a new organisational model to accelerate the simplification, efficiency and digitalisation of our Group operations
      • 79% of total business processes digitalised in 2020 (up 10 p.p. y-o-y)
  5. Our commitment to creating a more sustainable future is providing value for all of our stakeholders
    • We are leaders in sustainable development in our industry, delivering benefits for our customers, providers, employees and shareholders
      • Included in the CDP A list for the 6th year running
      • Achieved an A rating from MSCI
      • Sustainalytics #1 Global ESG Ranking in the telco industry
      • Strong credentials recognised by reputable organisations, such as Ranking Digital Rights (#1 globally for the second consecutive year) and Digital Inclusion Benchmark (#1 in Europe and the US; #2 worldwide)
      • Committed to achieving net zero emissions in our four main markets by 2025
      • 1st ever green bond issued in the sector
    • We are, and will continue to be, a key contributor in society’s efforts to build-back-better after Covid-19


NOTE: Figures from the latest publication available for each year, except for Net Financial Debt, redefined since 2019 and restated for comparison purposes for the previous years since the entry into force of IFRS-16