Telefónica is the only upward value on Monday at the start of the Ibex trading session. The telecommunications company "is in the negotiation phase" with Liberty Global for "a possible integration of their respective telecommunications businesses in the United Kingdom", as the company has recognized the National Securities Market Commission (CNMV) . The operation would unite two of the main telco businesses in the country and would serve so that together they would face British company BT, the main company in that market.
At the moment, the Spanish multinational chaired by José María Álvarez-Pallete cannot detail "neither the precise terms nor the probability of success" of these conversations for the integration of the brands, O2 (belonging to Telefónica) and Virgin (of Liberty Global) . The first provides mobile service and would complement its offering with Virgin's portfolio, which is not lacking in fixed broadband options.
On Friday, the Bloomberg agency advanced these negotiations to create a new company with a business value calculated at approximately 30,000 million dollars (around 27,400 million euros)
The telecommunications sector, although it has not suffered particularly from the coronavirus crisis, given its digitization, does face a period of heavy investment by 5G in a scenario of impossibility of revenue growth, a trend that the pandemic would accentuate to the downside : According to Moody's, which calculates a drop in telco billing in Europe of around 2%.
This Thursday, Telefónica plans to report the results of the first quarter, in which this pandemic would have already influenced, since half of March was spent in Spain in a state of alarm. In addition to that impact, the company has just fitted another setback: Milicom's slowdown in the purchase of Telefónica's business in Costa Rica , an operation of 570 million dollars (503 million euros) that has been frustrated and that Telefónica is going to have to take to court.
UK, key market
In its latest annual accounts, the Spanish multinational argued why its recent concentration in four markets: Spain, Germany, Brazil and the United Kingdom: they are the ones that work best. In British lands, through O2, Telefónica entered 7,109 million euros last year, 4.7% more than in the same period of the previous year. The company has managed to sign 14 consecutive quarters with revenue growth in the United Kingdom .
There, Telefónica's clients stand at 34.9 million, 5.7% more than a year earlier, with improvements during 2019 in fixed telephony clients (2.1%), in data (2.5%) and also on mobile (3%). However, joining O2 and Virgin would be an exponential leap, in practice being able to compete head to head with the incumbent British operator, BT.
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- United Kingdom
- José María Álvarez-Pallete
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