New Leadership at Telefonica: A Strategic Shift
In a surprise move, Spanish telecom giant Telefonica’s board has appointed Marc Murtra, chairman of defence company Indra, as its new CEO. This decision comes after state-owned fund SEPI requested the replacement of current Chief Executive Jose Maria Alvarez-Pallete.
A Change in Direction
The board’s extraordinary meeting on Saturday resulted in the termination of Alvarez-Pallete’s contract, paving the way for Murtra to take the reins. This move still requires shareholder approval, but it marks a significant shift in the company’s leadership.
Background and Experience
Murtra, who has led Indra since 2019, has focused on expanding the company’s defence and aerospace business. This strategic move has allowed Indra to capitalize on the increasing military budgets of European countries amidst rising global tensions.
Government Involvement
The Spanish government, which owns 28% of Indra, has been instrumental in this change. In May 2024, the government acquired a 10% stake in Telefonica through SEPI, worth approximately €2.3 billion. This move was seen as a counterbalance to Saudi Arabia’s STC acquiring a similar stake in late 2023.
Telefonica’s Challenges
In recent years, Telefonica has faced significant challenges, including intense competition and the need for substantial investments in 5G infrastructure. To address these issues, the company has been selling stakes in mature businesses, such as submarine cables and mobile masts, to fund its 5G and optic fibre initiatives.
A New Era for Telefonica
With Murtra at the helm, Telefonica is poised to embark on a new era of growth and transformation. As a strategic company, the government’s involvement is likely to play a significant role in shaping the company’s future direction.
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