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Telefónica Outlines Strategy to Consolidate European Telecoms, Divest Latin American Assets

Thu, Sep 11, 2025, 12:01 PM 2 min read

Telefónica (NYSE:TEF) is one of the most undervalued telecom stocks to invest in. On September 8, Telefonica CEO Marc Murtra outlined his vision for a consolidated European telecoms market, stating that the company is looking to acquire telecom assets in Europe and Brazil while selling off its Spanish-speaking Latin American assets.

The strategy is part of a broader plan to increase scale and maintain the company’s investment-grade credit rating. Murtra argues that Europe’s telecom market is too fragmented, with 41 companies serving over 500K mobile customers each in 2024, compared to only 5 in the US, 4 in China and Japan, and 3 in South Korea. He believes that in exchange for consolidation, European telecom companies should invest in other related sectors, such as cybersecurity and data centers, as part of a social contract with regulators.

Telefónica Outlines Strategy to Consolidate European Telecoms, Divest Latin American Assets

To gain financial flexibility for M&A, Telefonica has agreed to sell its units in Argentina and Uruguay and is exploring potential sales in Chile, Mexico, and Ecuador. Analysts at Kepler believe these sales could provide up to 3.6 billion euros ($4.21 billion) in funding. Potential acquisition targets for Telefonica could include Vodafone Spain, a joint venture with 1&1 in Germany, assets in Brazil, or a 50% stake in Virgin Media O2.

Telefónica (NYSE:TEF) provides telecommunications services in Europe and Latin America. The company offers mobile & related services and products.

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