Spanish incumbent Telefonica has announced a set of major changes to its organisational structure, with the integration of its Spanish operations into its European unit and the creation of a new division based in London.
Telefonica outlined three major…
Spanish incumbent Telefonica has announced a set of major changes to its organisational structure, with the integration of its Spanish operations into its European unit and the creation of a new division based in London.
Telefonica outlined three major changes.
The first is the creation of a new unit, Telefonica Digital, which will be headquartered in London.
Telefonica said that the mission of its new unit would be “to bolster Telefonica’s place in the digital world and leverage any growth opportunities arising in this environment[…]”.
Telefonica Digital will be led by Matthew Key, who has been Telefonica’s Head of Europe.
A Telefonica spokesman emphasised that the partial move to London means Telefonica will be closer to its investment community.
The second change involves the company’s organisation across its operations in Spain, the rest of Europe and Latin America.
Its Spanish operations will now be integrated into its European unit.
This change also entails several executive moves.
The head of Latin America, Jose Maria Alvarez-Pallete, will become head of Europe. New head of Latin America will be Santiago Fernandez Valbuena, who was previously general manager of strategy, finance and corporate development.
Angel Vila has been appointed to Telefonica’s executive committee as the new head of finance and corporate development.
The third change is the creation of a new “Global Resources” unit. Telefonica said that this unit will be “designed to ensure profitability and sustainability of the business by leveraging and unlocking economies of scale, as well as driving Telefonica’s transformation into a fully global company”.
The move to integrate the group’s Spanish operations in its European unit comes after disappointing recent results in Spain.
Telefonica’s January-June results showed that revenues for Telefonica Espana stood at E8.8bn, down from E9.3bn for the same period in 2010. OIBDA was down to E3.9bn from E4.4bn in 2010.
This stood in stark contrast to strong growth in Latin America and, to a lesser extent, Telefonica’s other European operations.
Revenues in Telefonica Latin America increased by 18.4% year-on-year to E14.1bn, while revenues in Telefonica Europe (not including Spain) was up 2.2% to E7.7bn.
Morgan Stanley analyst Luis Prota said: “We see new units Telefonica Digital and Global Resources as key divisions to boost growth and take opportunities that could arise in such a dynamic sector.”
But he added that from a stock market point of view, the results of these new units would be less visible in the short term.
