Spain’s Telefonica reshapes Latin America strategy after leadership change

Nov 4 (Reuters) – Spanish telecom giant Telefonica has accelerated plans to reduce its exposure in Spanish-speaking Latin America, where profitability is lower than capital cost, to focus instead on four main markets under new CEO Marc Murtra.

Following both an ownership and a management shake-up in 2024, Telefonica has withdrawn from many countries in South America, building on a process that began with the sale of some Central American units in 2019.

Telefonica, which presented a new strategic plan on November 4, will now focus on four core markets – Brazil, Britain, Germany and Spain.

Below is a list of developments within the group’s Latin America operations:

Telefonica is in exclusive talks to sell its Mexican business to Beyond ONE, the owner of Virgin Mobile Mexico, three sources with knowledge of the negotiations said in July.

Asked about the process during a second-quarter earnings call, Murtra declined to give details about possible asset sales.

Telefonica said in February it was selling its unit in Argentina to Telecom Argentina for $1.245 billion.

Telefonica agreed to sell its Peruvian unit in April to Argentina’s Integra Tec International for about 900,000 euros ($1.04 million). The unit had filed for bankruptcy protection in February.

Telefonica booked 1.7 billion euros in capital losses in the first quarter on the sale of its units in Peru and Argentina.

The head of Telefonica Venezuela, Jose Luis Rodriguez Zarco, rejected speculation that the subsidiary was being put up for sale when speaking to reporters on the sidelines of a Caracas event in September.

In February, Rodriguez said it planned to invest $500 million in the country over two years to expand 4G and 5G services.

Telefonica agreed in March to sell its majority stake in its Colombian unit for $400 million to Millicom International  which operates telecom companies across Latin America under the Tigo brand.

Telefonica sold its Uruguayan unit for $434 million to Millicom.

Telefonica sold its unit in Ecuador to Millicom for $379 million.

Telefonica Chile said in October that it had received non-binding expressions of interest and conducted due diligence with several potential buyers for its assets, without mentioning them.

Earlier that month, Mexico-based America Movil said it signed a non-binding agreement with Entel to jointly explore an offer for Telefonica’s assets in Chile.

Telefonica sold its mobile phone unit in El Salvador in 2021 to General International Telecom in a deal valued at $144 million.

Telefonica sold its Panama unit in 2019 to Millicom for 536 million euros.

Telefonica sold its Costa Rica unit in 2020 to Liberty Latin America in a $538 million transaction.

Telefonica’s mobile telecom assets in Nicaragua were sold to Millicom in 2019 for an original cash consideration of $437 million.

Telefonica sold its operations in Guatemala to rival America Movil for 293 million euros in 2019.

Telefonica’s Sao Paulo-listed unit Telefonica Brasil is part of its four “core businesses”. The subsidiary carried out several small acquisitions, such as cloud services firms IPNET and IPNET USA, for up to 230 million reais ($41.49 million) in 2024.