Telefónica announced a new action plan, which includes decoupling its operations in Latin America (not including Brazil) and focusing its business in Brazil, Spain, the United Kingdom and Germany. The announcement was made by José María Álvarez-Pallete, Executive Chairman of the Telefónica Group through a letter to the entire community of the company, entitled ‘The New Telefonica’, which highlights the creation of an ‘operational spin-off of the business in several Latin American countries’.
‘Until a few years ago, our operations in Latin America were the driving force behind the company’s growth. However, the particular conditions in these markets have had an impact on the business, reducing its contribution in recent years for various reasons (macro and regulatory environment, greater competitive pressure, insufficient scale or volatility of currencies), and despite the enormous efforts of our local teams, which have always shown a strong commitment’, said Alvarez-Pallete.
The executive added that ‘this situation has led us to adopt a new model for these operations, which will now be managed as an autonomous unit with a dedicated team. With this step, we begin the review of our portfolio of assets in Hispanoamérica (Latam, not including Brazil), with the dual objective of modulating our exposure to the region, while creating the conditions to maximize its value, both via growth, consolidation and potential corporate operations’.
According to Telefonica, the new unit ‘will have a specific and differential management team from the rest of the Group, whose aim will be to attract investors and get potential synergies with other market agents, with a philosophy of guaranteeing and maximize the service it offers to its customers’.
The unit’s leadership will be in charge of Alfonso Gomez Palacios as CEO of Telefónica Hispam, responsible for all assets and operations in Argentina, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela. In Brazil, Álvarez-Pallete confirmed that Christian Gebara will continue as CEO at Vivo, name under which Telefónica’s operations in that country are known.