Telefónica

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Telefónica S.A.

Type	Public (Euronext: TEF, NYSE: TEF, LSE: TDE, FWB: TEF, TYO: 9481 )
Founded	1924
Headquarters	Madrid, Spain
Key people	César Alierta, CEO
Industry	Telecommunications
Products	Communication services
Revenue	€37.882 billion (2005)
Operating income	€8.558 billion (2005)
Net income	€4.445 billion (2005)
Employees	207,641
Subsidiaries	Telefónica de España Telefónica Moviles Terra Networks, S.A. Vivo
Website	www.telefonica.com

For the Puerto Rico telecommunications company of the same name, see Puerto Rico Telephone Company.

Telefónica, S.A., (IBEX-35:TEF, Euronext: TEF, NYSE: TEF, LSE: TDE, FWB: TEF, TYO: 9481 ) is a Spanish telecommunications company. Operating mainly in Spain and Latin America it is one of the largest fixed-line and mobile telecommunications companies in the world, 4th in terms of number of clients and 4th in total market value, only behind the British mobile telco Vodafone and the American telcos AT&T and Verizon.

Created in 1924, until liberalization of the telecom market in 1997 Telefónica was the only telephone operator in Spain and still holds a dominant position, over 75% in 2004. Since 1997, the Spanish government has privatised its interest in the company.

[edit] Key operations

[edit] Europe

Edificio Telefónica en la Gran Vía de Madrid.

[edit] Spain

Telefónica is the second largest corporation in Spain. It owns Telefónica de España which is the largest fixed phone and ADSL operator in Spain, Telefónica Moviles the largest mobile phone operator in Spain (under the movistar brand) and Terra Networks, S.A. an internet subsidiary.

[edit] Czech Republic

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 July 1st, 2006, both companies were merged into one legal entity and renamed Telefónica O2 Czech Republic.

[edit] Slovakia

In summer 2006, Telefónica (Telefónica O2 Slovakia) won the tender for the 3rd mobile phone operator in Slovakia, under the brand O₂. It will begin to provide services on the 2 February 2007, of which the first customers' registration started from the 15 December 2006 under the operation O₂ Jednotka. At the start, it will provide a basic pre-paid service, and in the 2nd quarter of 2007, O2 start contracts.

[edit] United Kingdom, Republic of Ireland, Germany and Isle of Man

On 26th January 2006 Telefónica completed its £17.7 billion (€ 25,7 billion) acquisition of the UK-based operator O₂ which provides mobile phone services in the UK, Republic of Ireland, Germany and Isle of Man (where it also operates a small number of fixed-line services). As part of the takeover deal these services will continue to use the O₂ brand and be based in the UK.

Telefónica is also the owner of Telefónica Deutschland and Telefónica UK, two alternative IP carriers which provide of the merger of two ISPs, Telefónica subsidiaries, 'mediaWays' and 'HighwayOne' merged in January 2003, purchased by Telefónica in 2001 and February 2002 respectively.

[edit] Latin America

Telefónica operates the movistar mobile phone brand throughout Latin America. In Mexico it ocupy a far second place as mobile phone operator and the largest in Chile, Venezuela and Peru. See movistar article for complete country list.

[edit] Argentina

Telefónica owns Telefónica de Argentina [1] which is the largest fixed-line operation in the country. It provides broadband, local and long distance telephone services in southern part of the country as well as the Great 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.

[edit] Brazil

Telefónica's largest fixed-line operation in Latin America is in Brazil where it provides broadband, local and long distance telephone services in the state of São Paulo. It also jointly owns the Brazilian wireless operator Vivo with Portugal Telecom. 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 Telecomunicações de São Paulo S.A.

[edit] Chile

In Chile Telefónica owns Telefónica Chile [2], formerly CTC (Compañía de Teléfonos de Chile) which is the biggest fixed-line operator and internet service provider [3] 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.

[edit] Ecuador

After acquiring 100% of OTECEL S.A. (Bellsouth), Telefónica Móviles Ecuador started its operations in October 14, 2004 as Movistar. It offers mobile solutions for the Ecuadorian market and is one of only three mobile operators in Ecuador.

[edit] Peru

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.

Telefónica is the owner of Cable Mágico (Cable Television Operator)Cable Mágico

[edit] Colombia

In April 18, 2006, Telefónica's president Cesar Alierta signs an agreement with the Colombian government to buy the 50% and one share of the state-property communications company Colombia Telecomunicaciones (TELECOM). With this sell, Telefónica becomes the Colombian biggest fixed-line operator, and also gains an important presence in the local, long-distance and broadband services. The mobile business is run by Telefónica Moviles through the brand movistar. It's unknown what's going to happen with their previous established subsidiary Telefónica Empresas, being most probable a merge with TELECOM. Now the company is known like Telefónica - Telecom

[edit] Puerto Rico

Telefónica in Puerto Rico has presence through Telefónica Empresas and Telefónica Larga Distancia. There is another "Telefónica" in Puerto Rico: PRT (Puerto Rico Telephone), the main telecommunications provider in the island, mostly owned by Verizon Communications. PRT is popularly and commonly referred as "Telefónica" because for many years it was marketed as: "Nuestra Telefónica" or "Telefónica de Puerto Rico", long time before Telefónica (of Spain) entered the Puerto Rican market.

Telefónica (of Spain), through its sister company Telefónica Móviles participates in a "joint venture" with Newcomm Wireless/Clearcom called "MoviStar"(spelled with capital "M" and with a capital "S" in the middle). Although it has the same name as Telefónica's international wireless company, it is treated as a completely different company. MoviStar Puerto Rico uses the CDMA wireless standard, widely used in the United States; "movistar" in the rest of the world, except for Venezuela, uses (or is currently migrating its networks towards) GSM as its basic technology. The logo and culture of the company in the puertorrican market is different from its Spanish relative.

Tuesday, 5 December 2006 Puerto Rico’s Movistar to restructure as part of catch-up plan Puerto Rico’s smallest cellco, New Comm Wireless Services, which operates under the Movistar brand name of its part-owner Telefónica Móviles, has announced a major restructuring plan involving a USD110 million share transfer, reports BNamericas. The joint venture between US-owned Puerto Rican holding company Clearcomm and Telefónica said it will sell shares amounting to 35% of the company to an investment group headed by capital investment firms Columbia Capital and MC Venture Partners. No further details were released.

The restructuring is long overdue as Movistar is beginning to lose market share in a highly competitive sector of six operators; it accounted for around 8% of the country’s subscribers at the end of June. Separately, Movistar has secured financing for a USD38 million upgrade of its CDMA IS-95/CDMA2000 1x mobile network to 3G 1xEV-DO technology. The network upgrade should be ready for commercial launch in April 2007, local daily El Vocero reports. The other three CDMA mobile operators on the island, Centennial, Sprint and Verizon, all have commercial EV-DO operations.

[edit] China

Telefónica has a 9.9% stake in China Netcom as of 2006.^[1]

[edit] Africa

[edit] Morocco

Telefónica also has a stake in the second Moroccan operator , Méditel.

[edit] United States

Based In Miami, Telefonica USA Inc has given Telefónica a presence in the U.S. Opened in 2005, their Miami Key Center hold a storage facility for companies to place servers in a secure environment while giving 99.99% uptime. Locations include, Miami & Boca Raton FL, New York, NY, San Diego CA, Washington D.C, Atlanta GA, and Houston, TX.

[edit] Ownership

Telefónica is a publicly owned company. It is estimated that a large part of its stock is owned by capital investment funds. Major stockholders include:

JPMorgan Chase: 10.02%
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA): 5.62%
Caixa d'Estalvis i Pensions de Barcelona ("La Caixa"): 5.37%
Citibank: 4.66%
Capital Group: 3.60%

In addition to this, the company also holds 75% of Dutch TV firm Endemol in shares. On March 9, 2007, Telefónica confirmed its plans to sell its 75% share of Endemol. ^[2]

[edit] Sponsorship

Telefónica was a major sponsor of the Renault F1 Team until Fernando Alonso's departure to Vodafone McLaren Mercedes F1 Team. Through its acquisition of O₂ Telefónica also indirectly sponsors the BMW Sauber. F1 Racing estimates these sponsorships amount to $18 million and $15 million respectively.

They also used to sponsor the Ford Focus WRC during the 2000 season. The sponsorship said Telefonica Movistar on it and the stickers were on the fond bumber, the rear 3-quarters and the rear spoiler.

[edit] Business Practices

Telefónica has been continually targeted by most recent governments in South America because of its monopolistic business practices, due to the evidence of bribery and underhanded legal agreements when originally entering the markets in association with corrupt governments. Most of the administrations which allowed Telefónica entry into South American markets have been unmasked as corrupt and prone to bribery, a situation which, according to investigators, Telefónica took advantage of. To wit, Fujimori in Peru, Menem in Argentina, etc.

The problem lies in the fact that these administrations allowed Telefónica enormous latitude in the agreements, effectively giving them the power to operate above the law in some situations (for example, assigning or loaning land lines in Peru; where other companies must go through a lengthy approval process, Telefónica is able to unilaterally add or remove land lines at will). With the return to democracy, these nations have been attempting to resolve this situation and reach more balanced agreements with the company; however, Telefónica now takes advantage of the transparency and legality of these new governments and is reticent to give up any powers it gained with the older administrations.

[edit] References

^ Shenzhen Daily. September 7, 2005. Telefónica Takes Netcom Stake to 5%
^ Telefónica confirms sale of Endemol Digitalspy.co.uk, March 9 2007

[edit] External links

Official company website (English-language pages)
English distributor website
Telefonica Phone Manual
Yahoo! - Telefónica, SA Company Profile
Telefónica, SA stock quote & chart at Gstock

v • d • e

IBEX-35 Companies of Spain

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