Days of vertigo at Telefónica. This week the operator closed the sale of its subsidiary in Uruguay for 377 million euros. In parallel, it emerged that América Móvil, controlled by the Mexican businessman Carlos Slim, and the National Telecommunications Company (Entel) of Chile are exploring entering the bid for the assets in that country of the firm chaired by Marc Murtra. These are movements aligned with the path of divestments undertaken by Telefónica in countries such as Peru, Argentina and Colombia, within the company’s exit from Latin America. However, one country threatens to become a real thorn in the side of the Spanish operator in this process. According to various financial sources and others close to the firm, the plan to get rid of its Venezuelan subsidiary has been faced with the lack of a buyer for months.
The political scene is devilish. The front opened by the Trump administration against the government of Nicolás Maduro, even with the risk of a military escalation on the table, exposes companies with a presence in the country to the White House; These, on the other hand, do not find it easy to put the business in the current situation and, as they would like, to pack their bags. In the case of Telefónica, the messages issued by the company itself at the highest level have been somewhat contradictory. While Murtra has insisted that the strategy in this new stage involves accelerating the farewell to the Latin American continent and concentrating efforts on Europe, the president of Telefónica Venezuela, José Luis Rodríguez Zarco, sowed a seed of doubt and surprisingly denied the biggest one just a few days ago. “No one has spoken to me at all about the possibility of selling the operator in Venezuela. I honestly say it. Otherwise, I would be the first one surprised if this happened,” Zarco said at the end of September during the Venezuelan International Technology Fair (Fitelven), held in Caracas.
Venezuela generates mixed feelings at Telefónica. A former senior official with decades of experience in the operator remembers that, along with Colombia, Venezuela is the subsidiary that has historically worked best in the corporation. “At times, it has been a real cash register,” he confesses. However, the drift of the Chavista regime, with the problems of repatriating capital and the constant depreciation of the bolivar, left a large part of those gains in ruins. “It is a captive business, which would work again and be worth much more if US pressure ended up causing a political and regime change. Right now, it is not surprising that its value is close to zero,” he emphasizes. To the extent that the situation degenerates, this source explains, “the companies that remain will be increasingly alone.”
The figures do not lie. They are more than reasonable even now, years after income reached 3.7 billion in 2009 and the blow of inflation was accentuated. According to the company’s own reports, Venezuela registered a profit of 212 million in 2024, in the top five countries with the best performance in the conglomerate. It had already added another 101 million the previous year. However, Telefónica suffers more thorns than roses, and pays the tolls. At the end of 2024, the United States Department of Justice revealed that Telefónica Venezolana, the division of the company then chaired by José María Álvarez Pallete, had reached an agreement to pay a fine of 85.26 million dollars and close an investigation into a scheme to bribe officials in order to receive preferential access to US dollars in a currency auction back in 2014. “Telefónica Venezolana chose to support a corrupt regime to avoid the difficulties of doing legal business in Venezuela,” explained a prosecutor.
The disbursements don’t stop there. Last February, the firm announced an investment of 500 million dollars (482 million euros) in two years to expand its 4G coverage and begin deploying the 5G network, after being awarded a license to operate those frequencies. A bet apparently discordant with a plan to exit the region, but which can be argued by the obligation to make these investments to comply with the demands of the Venezuelan supervisor.
The political connotations of any decision are inevitable, no matter how much the demands of the script are set by the business. According to the National Securities Market Commission (CNMV), the shares of the operator are shared by entities such as BBVA (5%) and Fundación La Caixa (5%), leading firms in the national corporate network, with the public Sociedad Estado de Participaciones Industriales (SEPI) as the first shareholder with 10%. Carlos Ocaña, a director appointed by the Government, is vice president of the company. He was deputy chief of staff in the President’s Economic Office during the era of José Luis Rodríguez Zapatero. Murtra himself, among other political positions, was chief of staff in the Ministry of Industry of Joan Clos, former mayor of Barcelona for the PSC, also in the Zapatero era.
Strategic plan
The execution of the planned divestments in Latin America is especially relevant, since Telefónica needs muscle to face the demands of the new strategic plan that the company will present on November 4. According to knowledgeable sources, all options are on the table regarding this action plan. However, there is agreement that the company is preparing the transition from a time of containment, focused on reducing debt (still around 27 billion), to a growth project. A movement that requires financing, either through sales – with the divestment of a minority stake in Brazil as a possibility -; the implementation of a macro capital increase – which would force shareholders to step forward -, or the reduction of the dividend, traditionally an anathema in the company.
The magnitude of the challenge means that Murtra, who joined the company earlier this year after his time at Indra, is taking a chance on the market with that roadmap after years of depressed stock. He is aware that it is now or never to defend his manager profile. And you have work ahead of you, beyond the numbers and Excel tables. If, as the market estimates, the strategy points to the acquisition of Vodafone Spain as a preliminary step to more ambitious processes in Europe, sensitivity to geopolitical issues is key. Risks appear everywhere. At the end of August, Telefónica renewed a contract for its 5G network with Huawei, granting it management of the core or core of its 5G network for residential users from 2025 to 2030. European countries such as Germany or the United Kingdom have included Huawei on a list of risk suppliers, expressly prohibiting its contracting by the Administration or telecommunications operators. The operator defends that the Chinese supplier only provides the platform; that strictly complies with the recommendations of agencies and regulators, and that the data is managed by the company itself. You do well to put distance. Better to limit dangerous relationships.
