Telefónicawatch Analyst Briefing: Murtra’s M&A mantra

Elsewhere around Telefónica, and beyond

Gran Vía goodbye?

• Group: Reports in Spain have suggested that a rationalisation of Telefónica’s real estate portfolio could form part of the group’s strategy refresh, due for public release later in 2025. The operator is considering offloading its historic and emblematic former HQ on Madrid’s Gran Vía in a move that could raise about €300m, according to El Economista. It is unclear whether the operator would retain use of the building, which has been superseded by Telefónica’s newer Distrito C hub on the outskirts of the city, but still houses exhibitions run by Fundación Telefónica, as well as an Espacio Movistar-branded retail and entertainment facility that opened to coincide with the operator’s centenary in 2024. Previous reports have also suggested the operator could announce a huge round of job cuts in Spain, as part of the strategy update — ostensibly to free cash for investment and M&A in core markets.

Subsequent to the report on the Gran Vía sale plan, Telefónica Chile announced it has re-activated a plan to divest its corporate HQ in Santiago, to help it “focus resources on the core of its business”. The process is being supported by real estate services groups CBRE and GPS Property, and would see the operating business retain use of the building, as a tenant. It paused a search for a buyer for the offices in 2019, amid social unrest and the pandemic.

• Telefónica-backed telco API aggregation joint venture Aduna announced a slew of new partnerships to coincide with DTW — Ignite 25. Microsoft has formed a technology tie-up with the business, enabling it to use Azure infrastructure and AI apps to support its services, and market the APIs via the Azure Marketplace. Further, Japan’s SoftBank Corp and NTT DOCOMO, plus UK Channel Islands-based telco JT Global, have joined Aduna’s collection of operator backers, thus extending its products’ geographical reach. Aduna has also extended its go-to-market ecosystem by forming commercial relationships with US comms technology provider Syniverse and Indian systems integrators Wipro and Tech Mahindra. They add to existing channel tie-ups with Google Cloud, Infobip, Sinch, and Vonage (part of 50%-Aduna owner Ericsson). Beyond the new operator trio, Aduna’s telco participants include: América Móvil, AT&T, Bharti Airtel, Deutsche Telekom, KDDI, Orange, Reliance Jio, Singtel, Telefónica, Telstra, T-Mobile US, Verizon, and Vodafone.

Telefónica has its own distinct API go-to-market relationship with Microsoft, outside of Aduna (as well as deals with hyperscaler rivals Google Cloud and Amazon Web Services). Earlier this year it confirmed an Open Gateway API-focused expansion of strategic tech ties with the vendor, envisaging joint work to build out Kernel, the group’s core AI platform, and sell digital services through Microsoft’s Azure Marketplace.

• Telefónica Infra: Beesion, a US-based business support systems vendor, has secured a renewed supply agreement with On Net Fibra Colombia, Telefónica’s local fibre joint venture with investment group KKR. The deal will see On Net retain use of the Beefiber BSS/OSS 360° platform and work with the provider to explore “opportunities for further strengthening [its] technological architecture”, said Beesion. Formed in 2021, On Net has a reach of about four million premises in Colombia.
• Spain: Analysts at Barclays have mooted a stepup in RAN-sharing among Spanish telcos as a potentially more palatable option than full M&A. In a note, published following recent speculation that Telefónica España and MásOrange could move to buy and break up number-three player Vodafone Spain, the investment bank suggested MásOrange and Vodafone could instead form a full ‘RANCo’. This plan would build on a long-running network-sharing arrangement between Vodafone the erstwhile Orange Spain, but still have potential to deliver sizeable opex and capex savings while being more attractive to regulators than a four-to-three MNO dilution, Barclays intimated (via Merca2). It would see Spain’s mobile market move further towards a ‘dual-grid’ structure featuring the MásOrange–Vodafone tie-up and Telefónica aligned with challenger (and network access client) Digi.
• Telefónica España has reportedly lost Avatel Telecom as an MVNO customer, to arch-rival MásOrange. According to Expansión, Avatel will stop using Telefónica’s mobile network starting in January 2026 and will instead lease access to MásOrange’s network. Avatel has just under 700,000 mobile customers.
• Telefónica Empresas has debuted a service called fast2Cloud, which offers a virtual private network connection between clients’ data networks and the public cloud. The Spanish B2B unit is pitching the offering as a useful enabler for organisations using applications that require quick, reliable data transfer. It did not name any tech partners on fast2Cloud.
• UK: The UK’s government and MNOs have reworked 4G rollout plans laid out under the country’s Shared Rural Network (SRN) initiative, trimming back the number of state-funded masts to be delivered. Amid tightening of state finances and objections to the impact of masts in areas of natural beauty, the number of planned new-build towers has been slashed by government agency Building Digital UK.

According to European Union numbers (EU), regional defence spend reached about €326bn in FY24 — a 30%-rise in three years — and member states are expected to add another €100bn to outlay in real terms by FY27. In June, NATO members agreed to bring their defence spending target to 5% of gross domestic product by 2035.