“We are strategic, and we are strategic at the European level. The sector is strategic. “We are the key to the connectivity of the future.” This was one of the messages sent yesterday by the president of Telefónica, José María Álvarez-Pallete, and that he expressed in response to the interest of the Saudi fund STC and SEPI in becoming a shareholder. The second message was to insist on the deregulation of the sector at the European level.
In this area, his precise words were that “what is not understood is that we are regulated with rules from the last century. Therefore the only thing we ask is one thing, that we be deregulated, that we be allowed to compete. "Let us compete on equal terms like any other player, because the rules that gave rise to this regulation have become obsolete."
They were the only statements that Álvarez-Pallete made this Wednesday in reference to the company's position on the entry of the Saudi fund STC and the movements of the SEPI testing the ground for a potential entry.
The statements were made known through a video released by the company itself after the end of Investor Day and the presentation of third quarter results. Both events in which neither managers nor analysts addressed what was considered the star topic of the day, the role of STC and SEPI, although as explained by Telefónica Pallete did convey those impressions to the analysts present in a subsequent informal meeting. Strategic and deregulated company. That is what Telefónica claims.
What the company focused on was explaining its roadmap for the years 2023-2026, which it has named GPS. Anglo-Saxon acronym for Profitability and Sustainability Income Growth. Specifically, GPS promises an average annual revenue growth of 1% and 2% for the operating result before depreciation (ebitda). Added to this is a strict capital management policy to go from a cash flow of 4,000 million at the beginning of the period to 5,000 million in 2026, and continue reducing debt. All this accompanied by what its shareholders want most, a guarantee of a dividend of a minimum of 0.30 euros per share.
Specifically, the plan is based on five key vectors. Ensure the sustainability of growth in the retail market, strengthen the good momentum of corporate business and strengthen income derived from agreements with wholesale partners, in addition to reducing the cost structure and investment.
The first sensations that the company is already on that path have been the results of the third quarter of 2023, which closed with a net profit of 502 million euros, 9.3% more, compared to a fall of 15%, until 1,262 million, in the first nine months as a whole.
But perhaps the most radical change in the new policy is that Telefónica has said enough to its policy of continued investment in networks. “Peak investment is behind us... We are on the brink of a new era. The world is changing. We closed copper, we have the infrastructure to fully enter a new wave of emerging digital services,” said Álvarez-Pallete.
Harshly, the president of Telefónica criticized European legislation, accusing it of “creating fictitious competition.” He no longer wants to invest in networks that others use, “now we want to have our money, to be allowed to act without any regulation,” said Álvarez-Pallete.
