Telefonica: Managing Global Operations

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Excerpts

Early History Established in the early 1920s, Telefonica was initially owned by ITT of US. But it was nationalised by the Spanish government in 1945, with 41% of the shares held by the government. The company introduced long distance service in 1960, satellite communications in 1967 and an international service in 1971...

In the late 1990s, under CEO Juan Villalonga (Villalonga), who had worked with McKinsey & Co in the US and Europe and with Credit Suisse First Boston in Spain, Telefonica significantly improved its competitive position...

Villalonga strongly believed digital convergence was the way forward for the telecommunications industry. So, in March 2000, Telefonica paid €4.5 billion in stock to purchase Endemol, a Dutch media company...

Alierta believed Telefonica had to focus on its core strengths, which were its home base and fixed line services. Almost 75% of Telefonica's 2001 EBITDA came from its fixed-line business in Spain and Latin America; Spain alone produced 35% of the total...

Exhibit I: Telefonica: Global Footprint
Exhibit II: The Spanish Telecommunications Market, 2001
Exhibit III: Telefonica: Sales by Business Line

Exhibit IV: 3G Licenses Acquired by Telefonica Moviles
Exhibit V: Argentina: Annual Growth in %
Exhibit VI: Brazil: Annual growth in %

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