Telefonica’s Stellar Start to New Strategic Plan: Achieving Growth, Profitability, and Sustainability

Telefonica CEO Jose Maria Alvarez-Pallete highlighted the initial success of implementing the company’s new strategic plan through to 2026. In the first quarter of the year, the operator saw a 79 per cent increase in net income, reaching €532 million. Although revenue remained relatively stable at €10.1 billion, net debt rose by 7.7 per cent to €28.5 billion, largely due to the acquisition of a greater stake in its German unit. EBITDA also grew by 1.9 per cent to €3.2 billion. However, free cash flow, a crucial metric for its new Growth, Profitability, and Sustainability plan, was negative at €41 million.

The new strategic plan, unveiled in November 2023, aims for a 10 per cent increase in free cash flow and a 2 per cent rise in core earnings per year until 2026. Pallete noted that Telefonica had a strong start to the year, with the business reinforcing itself thanks to the implementation of a new roadmap and strategic plan, leading to improved revenue and commercial activity.

In addition to the financial figures, Telefonica announced a non-binding mobile network wholesale agreement with Romanian operator Digi Communications. A final agreement is expected to be disclosed in the coming weeks as their current deal is set to expire in September 2026.

Telefonica CEO Jose Maria Alvarez-Pallete stated that “We are pleased with our progress so far and remain committed to achieving our strategic objectives.” The company’s growth strategy includes expanding its market share in Europe and Latin America through acquisitions and partnerships while maintaining profitability and sustainability.

Telefonica has been working on its new Growth, Profitability, and Sustainability plan since late last year when it announced plans for major changes in its business model. The company aims to become more focused on digital services such as cloud computing and data analytics while also investing heavily in renewable energy sources like solar power.

Pallette emphasized that “Our goal is not just growth but sustainable growth that benefits our customers and stakeholders alike.” He believes that by focusing on these key areas, Telefonica can continue its upward trajectory over the next few years.

Despite these positive developments for Telefonica’s bottom line and future plans