As part of its five-year roadmap, Telefónica named Brazil, Spain, the United Kingdom, and Germany as priority markets and outlined specific targets for each country.

“We will grow faster than expected,” Telefónica CEO Marc Murtra said at a meeting with market analysts. In Brazil, the company expects key financial metrics to grow above inflation, said Chief Operating Officer Emilio Gayo.

Mr. Gayo highlighted several efficiency opportunities in Brazil, including the sale of legacy copper networks from the country’s former fixed-line telephone concession, digitalization of services, and the use of new technologies such as artificial intelligence to build and manage networks. Telefônica Brasil, which operates under the Vivo brand, expects to raise R$3 billion from the copper network sale by 2028, as announced in May.

The plan also calls for expanding the convergence rate of its fixed broadband customer base in Brazil, targeting 74% penetration by 2028, six percentage points above the current 68%. In telecom, convergence refers not only to bundling mobile and fixed-line services, but also to offering non-telecom digital services.

Telefónica also aims to grow its business-to-business (B2B) operations in Brazil, increasing the share of digital services in B2B revenue from 38% to 42% by 2028.

The company committed to expanding its fiber-optic network in Brazil, which reached 30.5 million households as of September. It also plans to reduce annual customer churn by 2.5 percentage points, though the current churn rate was not disclosed.

Minority stake sale not on the table

In June, a Spanish news outlet reported that Telefónica was considering selling a 20% stake in Vivo to reduce its debt, which stood at €28.2 billion at the end of September. The report triggered widespread speculation in Brazil.

Asked about the potential sale, Mr. Murtra said the company has other capital allocation options beyond those included in the strategic plan, which focuses on operational simplification to improve efficiency.

“The organic capital allocation strategy is what we’ve outlined,” he said. “It’s true there are other instruments beyond what we mentioned, but in our ‘business as usual’ scenario, we are sticking to the plan.”

Sources told Valor there are no plans to sell a stake in Vivo just to raise cash for the parent company. However, Telefônica Brasil might use its shares as currency in a future merger or acquisition, though no such deal is currently being negotiated.

Brazil stands out

Telefónica’s outlook for Brazil contrasts with its plans elsewhere in Latin America. The company confirmed on Tuesday (4) that it intends to exit all Spanish-speaking markets in the region, including Mexico, Chile, and Venezuela, though no timeline was given. The sale of its Colombian operation is already well underway, Mr. Murtra said.

While the strategic plan does not rely on mergers and acquisitions, Mr. Murtra said consolidation remains an option, especially in Europe, where 38 mobile operators are active.

“There should be European operators with scale comparable to their U.S. and Chinese counterparts,” he said.

Profit rises, dividend cut hits stock

In the third quarter, Telefónica reported net income of €276 million, up from just €3 million a year earlier. Adjusted EBITDA rose 1.2% organically to €3.07 billion, while revenue fell 1.5% to €8.96 billion.

Analysts estimate that consolidation in Telefónica’s core markets—Brazil, Spain, the UK, and Germany—could generate €18 billion to €22 billion in synergies. Those gains could be shared among buyers, sellers, consumers, investors, and innovation projects.

Despite the upbeat projections, Telefónica shares fell 13% on the Madrid stock exchange, following the announcement that dividends would be cut in half in 2026. The company plans to pay €0.15 per share next year, down from €0.30 in 2025.

“We believe in the company’s fundamentals, and that’s what we focused on in the plan,” Mr. Murtra said, adding that the board of directors and core shareholders backed the strategy, including the dividend adjustment.