Reasons To Invest


Backed by the optionality of €103bn in assets and operations serving around 350m accesses, business growth, operational execution and debt reduction continue to be the main drivers of value creation at Telefónica.

Our long-term strategy is aimed at generating sustainable, profitable growth by leveraging the strengths of our technology businesses, deploying the best quality networks and services, unlocking the value of our infrastructure assets and by streamlining and digitising our operations.

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

Our investment case reflects the five pillars of our strategy:

  1. Our four 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. On our core markets we have:
      • 210m retail accesses plus 13m wholesale accesses
      • 15m retail fixed broadband accesses of which 8m (58%) are FTTH (+10.8 p. p. y-o-y)
      • 42m FTTH premises passed (+19% y-o-y)
      • 170m retail mobile accesses, 51% contract
      • 95% LTE mobile network coverage (+2.8 p.p. y-o-y)
      • 5G networks launched in all 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. Thanks to our joint venture with Virgin Media in the UK and the acquisition of Oi’s mobile assets in Brazil, our position in our core markets continues to strengthen OIBDA-CapEx OIBDA CapEx 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 to approximately €26bn. Net Debt
  2. Our growing global Infrastructure and Tech businesses are building the world of tomorrow
    • Telefónica Tech, our technology division, is a key growth driver for the Group, consistently outperforming the market to deliver double-digit revenue growth over the last two years, accelerating to more than 25% y-o-y in Q1 21. Its two business units, Cybersecurity & Cloud Tech and IoT & Big Data. each leverage their commercial and operational capabilities, differentiated assets, and key global partnerships to serve the Group’s more than 5.5m B2B customers.
    • T. Tech provides best-in-class professional, integration, and managed services as well as proprietary solutions tailored to specific customer needs. Our offer is further enhanced by working alongside an extensive ecosystem of over 300 partners, enabling us to develop hybrid and private Cloud services (IBM/Red Hat), IoT connectivity services (Mavenir) and a new suite of managed Cybersecurity services.
    • Telefonica Infra is our infrastructure portfolio manager, focused on unlocking and monetising the value of our infrastructure assets and expertise across our towers, subsea cable and data centre assets, while building a leading global infrastructure business by bringing agility and optionality to the Group’s new fibre infrastructure investment plans, leading the creation of neutral wholesale fibre vehicles with co-investors including the creation of fibre vehicles in Germany and Brazil.
    • The sale of the division’s Telxius Tower assets to ATC for €7.7bn at a record multiple of 30.5x proforma OIBDAaL is a prime example of how we are unlocking value from our infrastructure expertise and asset base, reducing debt significantly and optimising our financial flexibility.
  3. Our non-core Hispam portfolio is increasingly self-sufficient with legal separation completed
    • We continue to optimise our non-core Hispam assets and manage our exposure to these markets through a more efficient operating model and through organic and inorganic alternatives. We have completed Hispam’s legal separation, maximising our strategic optionality and flexibility to realise value, reducing our regional exposure and contributing 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
      • As of Q1 21, nearly 80% of total business processes have now been digitalised, with 35% of sales going through digital channels and this proportion continues to grow.
      • Looking ahead, we are working on developing future network architectures. Following successful pilot projects, extended validation of Open RAN across our four core markets will take place during 2021 to 2022, targeting 50% radio network growth by 2025.
  5. Our commitment to creating a more sustainable future is providing value for all of our stakeholders
    • All our actions are guided by the UN Sustainable Development Goals, targeting Net Zero Emissions in our four main markets by 2025
      • Leading by example by building trust capital with our customers, employees, suppliers and shareholders
        • Refined our non-financial objectives for short-term and long-term remuneration
        • Promotion of gender equality; Bloomberg Gender Equality Index
        • Our achievements are reflected in our ESG ratings which include A ratings from CDP (Environment), being ranked #1 among global telcos by the Ranking Digital Rights (Governance), being ranked #2 worldwide in the Digital Inclusion Benchmark (Social)
      • Helping Society Thrive, economic and social development based on digitalisation
        • Issued first sustainability hybrid bond of the sector valued at €1bn, including green and social projects to deploy broadband in rural and remote regions and promoting employability.
        • Wayra initiative has driven the creation of more than 10,000 skilled jobs
      • Building a Greener future through digitalisation, we continue to contribute to a more sustainable, circular and decarbonised world
        • Founding member of the European Green Digital Coalition; green digital solutions for an innovative, sustainable and resilient economy
        • Certifying our ECO-Smart seal which guarantees environmental benefits from our digital solutions


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