This was stated yesterday the president of Telefonica, Jose Maria Alvarez-Palletewhich states that Telefónica Spain’s fiber optic network is “strategic”, reiterating that they must keep control of this asset key code. However, they do not rule out carrying out a partial sale of the network through the entry of some investor to bring out the value and help with the deployment of fiber that remains to be carried out in Spain.
Possible sale of part of its fiber network
The president of Telefónica affirms that 2022 is going to be a very important year in the consolidation of the transformation that the operator began in 2019. This new strategic plan involves reducing its international exposure and its debt, focusing above all on the Spanish market. At the same time, they are diversifying and looking for new business opportunities in all kinds of sectors, as we have seen with alarms or the telemedicine sector.
Rumors arose last October about the possible sale of the 25% of the fiber network of the operator in Spain, as reported by Bloomberg. Currently they are not focusing so much on reducing debt as finding new avenues of income. The Telefónica fiber in Spain It is valued at around 15,000 million euros.
By comparison, the debt amounted to 25,000 million euros at the end of last September, 31.8% below the 36,676 million to which it amounted just a year earlier. The figure is likely to have continued to decline in the last four months, as the operator has sold its El Salvador subsidiary and its stake in the Colombian fiber subsidiary. In total, both operations have generated an income of around 300 million euros.
José María Álvarez-Pallete, who yesterday received the Economic News Award to the best businessman of the year 2021, took the opportunity to celebrate the progress that Spain has made in the last 40 years, where the country «has been able to create an additional GDP equivalent to the economies of Norway and Switzerland together; to multiply by 14 times the GDP per capita; of multiplying the number of university students by 9, the number of women in the labor market almost by 3 and the network of highways and expressways by 16». He also insisted that we have one of the best digital infrastructures in the world.
The truth is that Telefónica has the second largest fiber optic network in Europe. Last year, the operator was overtaken in real estate units by Orange in France, which has become the largest network in Europe. It is difficult for Movistar to continue growing in Spain, since the large urban centers are already practically wired, with Movistar fiber coverage that will soon reach 90% of the population. In France, however, there are still many unwired real estate units, hence there is more room for growth.
The sale of Movistar +, on the table
However, as stated Antonio Lorenzo in The EconomistMovistar is indeed studying the entry of a partner in Movistar+. The operator has been thinking about the future of his television business for several years, and now they could sell a part of that business to a company with “a solid presence and recognized prestige in audiovisual matters and communication”.
Movistar+ is one of the most important values of the operator, where it has 4.6 million Fusion customers, with an ARPU of 89.6 euros per customer. In 2020, Telefónica Audiovisual obtained 74.1 million euros in profits, in addition to the indirect benefit that implies having higher revenues in convergent packages thanks to the attractiveness of its audiovisual offer.