Telefonica
Spain’s Dominant Telecoms Provider
Telefonica, S.A. is a global telecommunications company based in Spain. It ranks among the largest operator of fixed-line and mobile communications services in the world in term of the number of clients. After its acquisition of O2 Plc, Movistar and Manx Telecom, it’s the world’s third largest behind China Mobile and Vodafone as of end of 2007.
A Long History
Founded as a government –owned telecoms company in 1924, Telefonica was the only telephone operator in Spain at that time. Even after the communications industry was liberalized and the company privatized in 1997, Telefonica still enjoys a dominant position in the local market.
In January 2008, Telefonica acquired the UK operator O2 Plc for ₤17.7billion. As part of the acquisition deal, O2 retains its brand, network services and to remain in the UK. O2 has global network service reach that includes Germany, Ireland and Isle of Man where it operates land-line telephone services.
The acquisition binge that included other telecom companies outside of Spain has made Telefonica a force in the global fixed line and mobile telecommunication industry. It didn’t mind being fined by the EU for breaching its anti-trust laws. In 2007, the European Commission ordered it to pay anti-trust fine of nearly 152 million for harming the Spanish broadband consumer markets and the Spanish business for its monopolistic activities. The position was that harming an EU member state’s business interests and economy and by extension was tantamount to harming Europe’s economy.
Ownership
As a publicly owned and listed company, Telefónica has the following major stockholders: JP Morgan at 10.02% holds the single largest block followed by Banco Bilbao Vizcaya Argentina SA, Caixa d’Estalvis I Pensionsde Barcelona, Citibank and Capital Group at varying percentages. For the balance, it is estimated that most of its stocks are owned by capital investment houses.
