May 18, 2021

Pallete defends the strengths of Telefónica and aims for networks and new businesses to continue growing

Pallete defends the strengths of Telefónica and aims for networks and new businesses to continue growing


Markets have long questioned the growth and profitability potential of the telecommunications sector. Proof of this is the evolution of Telefónica in the Stock Market, with its shares trading at historic lows. The president of the first Spanish teleco, José María Álvarez-Pallete, does not ignore this reality, but this Thursday he took advantage of the traditional annual meeting of the group's managers to defend the operator's strengths and to point out that the sector is presented with growth opportunities that Telefónica can capture.

"We have done a lot, but it is not enough, we have to do more. We have a world of opportunities ahead that we can not let go. Telefónica is specially prepared to take advantage of that moment », has harangued during his speech at La Caja Mágica in Madrid before 900 executives of the group around the world, which will present between now and tomorrow the new business plan of Telefónica for the period 2019-2021, baptized as «Reconnects» and focused on sustainable growth, mainly through the new businesses offered by the digital revolution and the traditional one in infrastructures.

"We have to move forward, we have the opportunity for sustainable growth. We will grow if we are more relevant to our customers and then we will grow in revenue. If we are relevant and grow in income, we can raise returns to the time we invest more. But it will not be enough either, "said Telefónica's first sword in a speech away from any complacency.

Almost 80,000 million investment since 2015

This is Álvarez-Pallete's first strategic plan as president of the teleco, which has started his speech highlighting the transformation that Telefónica has experienced over the last four years during the plan – "We chose everything" – that had been launched by its predecessor, César Alierta, but what he himself had piloted to a large extent. Since 2015, Telefónica has gained nine million clients and a good part of them with higher average revenues. Less than half of the company's revenues, for the first time in its history, come from the voice service, occupying the data and other digital services that place. Telefónica has advanced in efficiency, cutting for example 35% the costs of its corporate center and reducing a good part of its structures.

"For the first time in nine years we have been growing for three years in terms of income, operating income (oibda) and cash generation," said Álvarez-Pallete, who indicated that this growth in results has also increased margins. of business. Further, The company has reduced its debt by 10 billion since 2015, one of its greatest challenges, and at the same time In this period, it has invested 79,000 million euros in networks, quadruple of what it has paid in dividends..

"Telefonica is today stronger than five years ago," reiterated the group's president, who in any case explained that investors are questioning the capacity of the telcos sector, especially European ones, to make their operations profitable, for the strong investment in networks that will have to do, the competition of digital giants and obsolete regulation, among other causes. Even so, Álvarez-Pallete has rejected the idea of ​​those who believe that telcos will end up turned into mere "utilities" and guaranteed that there are business opportunities for the company. "We have a world of new opportunities ahead that we can not miss," he insisted, citing above all the business linked to the largest increase in data traffic that will continue to occur in the coming years with the emergence of new services digital

Fixed and mobile networks, key

"There will continue to be an explosion of data and this means that our traffic will increase by four in the mobile and by three in the fixed networks on levels that are already huge, and that speaks to the relevance of our networks. Infrastructures are at the heart of this transformation. The revolution that is going to occur in connectivity is tremendous. We need faster, more capable, safer and simpler networks, that is the opportunity we have, "explained the senior executive, who has mentioned other businesses as the" blockchain ".

"In volume businesses that are already important there is growth, but in others that are still small such as pay TV and terminals, or cloud computing and the internet of things there is potential and they are growing in double digits. Those waves have an opportunity to capture them, there is growth in this sector, there is growth ahead for Telefónica, "he added.


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