Telefonica restructures, puts digital front-and-centre - Mobile World Live

Telefonica restructures, puts digital front-and-centre

27 FEB 2014

Telefonica announced what it described as a “new, totally customer-centred operating model”, which will see it “incorporate digital offerings into all of its commercial activity”.

This is accompanied by a restructure, which will see the work of Telefonica Digital, Telefonica Europe, and Telefonica Latam merged into the “Global Corporate Centre”, simplifying the organisation.

“The deployment of LTE, the massive adoption of connectivity on all kinds of devices, the new digital services and the growing use of video, have all made the growth seen in recent years pale into insignificance when compared with the volume of mobile data traffic we are going to see over the next five years, which is expected to multiply by 11 with respect to 2013,” said Cesar Alierta, president of Telefonica.

The company said its strategy is supported by “four pillars in the short term”: growing revenue by extending the commercial offering to new services in the digital world; modernising networks and systems, through accelerating the deployment of the most modern technologies; increasing efficiency through simplification and cost-cutting as well as ongoing financial discipline, prioritising investment in growth projects that generate added value; and strengthening its leadership in the digital ecosystem, “by driving a new public positioning enabling the hypersector to re-establish balance in the value chain”.

Among the changes, the company said it had created the role of the Chief Commercial Digital Officer, with responsibility for “fostering revenue growth”. It also said it had strengthened the role of Chief Global Resource Officer, in order to “capture gross savings of up to €1.5 billion “in the next year”, as well as having responsibility for “the synergies plan in Germany”.

The changes come as the company announced its fourth quarter 2013 numbers. It announced a net income of €1.45 billion for the fourth quarter, up from €473 million in the prior-year period, on revenue of €14.44 billion, down 8.9 per cent from €15.84 billion.

For the full year, net income was €4.59 billion, up 17 per cent from €3.93 billion, on revenue of €57.06 billion, down 8.5 per cent from €62.36 billion.

The company closed the year with €45.4 billion of net debt, “comfortably meeting the objective of closing the year with a debt lower than €47 billion”.


Steve Costello

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