Telefónica

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Telefónica S.A.
Type of Company Public (NYSE: TEF, TYO: 9481 )
Founded 1924
Headquarters Spain 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.
Telefónica Publicidad e Información
Website www.telefonica.com
Telefónica CTC Chile building in Santiago, Chile
Enlarge
Telefónica CTC Chile building in Santiago, Chile

Telefónica S.A. (NYSE: 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 6th in total market value.

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.

Contents

[edit] Key operations

[edit] Europe

[edit] Spain

Telefónica is the 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), Terra Networks, S.A. an internet subsidiary and Telefónica Publicidad e Información publisher of the Spanish Yellow Pages.

[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, Telefonica won a tender for the 3rd mobile operator in Slovakia Telefonica O2 Slovakia s.r.o. Its holder is Telefonica O2 Czech Republic. It will begin to provide services in february 2007, registration of customers will launch in december, 15th morning.

[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 is the second largest 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 CTC [2] (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. It's also unknown if there's going to happen a change of corporative name and image or if the company is going to be still named TELECOM.

[edit] Puerto Rico

Telefonica in Puerto Rico has presence through Telefonica Empresas and Telefonica Larga Distancia. There is another "Telefonica" 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 "Telefonica" because for many years it was marketed as: "Nuestra Telefonica" or "Telefonica de Puerto Rico", long time before Telefonica (of Spain) entered the Puerto Rican market.

Telefonica (of Spain),through its sister company Telefonica 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 Telefonica'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.

[edit] China

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

[edit] Africa

[edit] Morocco

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

[edit] United States

Based In Miami, Telefonica USA Inc has given Telefonica 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:

[edit] Sponsorship

Telefonica is a major sponsor of the Renault F1 Team. Through its acquisition of O2 Telefonica also indirectly sponsors the BMW Sauber. F1 Racing estimates these sponsorships amount to $18 million and $15 million respectively.

[edit] Business Practices

Telefonica 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 Telefonica entry into South American markets have been unmasked as corrupt and prone to bribery, a situation which, according to investigators, Telefonica took advantage of. To wit, Fujimori in Peru, Menem in Argentina, Pinochet in Chile, etc.

The problem lies in the fact that these administrations allowed Telefonica 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, Telefonica 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, Telefonica 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

  1. ^ Shenzhen Daily. September 7, 2005. Telefonica Takes Netcom Stake to 5%

[edit] External links

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