• Telefónica has presented its long-awaited strategic review
• It aims to cut €3bn from its annual costs by 2030 and generate better than previously announced revenue growth
• The plan does not include specific M&A plans, but Telefónica is “ready to seize” any relevant opportunities in its four core markets

Telefónica’s CEO Marc Murtra used the operator’s Capital Markets Day meeting in Madrid to unveil the strategic review he and his team have been working on since he was parachuted in to replace José María Álvarez-Pallete at the Spanish telco in January. 

Murtra has launched a new five-year strategic plan called Transform & Grow, which replaces the former Growth, Profitability and Sustainability (GPS) strategy laid out in late 2023. That strategy included an annual revenue growth rate target of about 1% and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 2% for the 2023-26 period. 

The new plan is more ambitious. It rests on six strategic pillars: 

1. Deliver best-in-class customer service: Telefónica “will enhance network performance and customer care across all channels. Service excellence and customer experience are key, and the company plans significant investment in artificial intelligence to strengthen both.”
2. Expand the B2C [business-to-consumer] offering, with a greater focus on convergence across its four key markets (Spain, Germany, the UK and Brazil): “The company will reinforce convergence in Spain and Brazil, expand it in the UK and Germany, and boost ecosystem services to grow B2C revenues and household presence. Telefónica will accelerate both convergence and the digital ecosystem – two key growth drivers.”
3. Scale the B2B [business-to-business] and public administration business: “Telefónica aims to modernise communication services in Spain and Brazil, seize opportunities in the UK and Germany, and accelerate growth in digital services by leveraging Telefónica Tech, global business units, and local partnerships with companies and sales channels.”
4. Evolve its technological capabilities: “The company will invest in fixed and mobile networks, upgrade IT systems and focus innovation on technologies that enhance its product portfolio, performance and customer value proposition.”
5. Simplify the operating model: “Telefónica will evolve towards a simplified group operating model, granting greater autonomy to countries and global units focused on critical roles and value creation through scale.”
6. Develop talent: “The company will attract and retain the very best professionals across all markets and strengthen a culture focused on impact and execution.”

It has the over-arching aim to “drive growth, create long-term value, and bolster its leadership across its main markets while accelerating its technological, operational and commercial evolution”. 

Naturally, there are some financial targets baked in, with a “number of initiatives aimed at improving the group’s operational efficiency”. 

This is expected to “deliver a gross impact of up to €2.3bn in savings in 2028 and €3bn by 2030”. 

Key financial objectives for the 2026-30 strategic plan include a compound annual growth rate (CAGR) of 1.5% to 2.5% in revenues between 2025 and 2028, accelerating to between 2.5% and 3.5% from 2028 to 2030; and a CAGR of 1.5% to 2.5% in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the 2025-28 period, accelerating to between 2.5% and 3.5% from 2028 to 2030. 

Telefónica also reiterated its commitment to Europe’s strategic autonomy as well as its call for greater consolidation in the region’s telecoms market. 

“While the 2026-30 strategic plan does not include consolidation opportunities, Telefónica remains ready to seize any that may arise within the plan’s timeframe”, it added. For more details, see this press release.

- Anne Morris, Contributing Editor, TelecomTV