News: Telefonica weighs up options in latam

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Mobile operators financial woes in Peru add to its worries in Argentina and Chile

Telefónica, the Spanish telecommunications giant, is negotiating the sale of its Peruvian subsidiary due to ongoing financial losses and disputes with the Peruvian government.

The subsidiary, Telefónica del Perú, has faced significant challenges, including accumulated losses potentially exceeding 2bn euros in 2025 and legal battles over taxes and regulatory issues dating back two decades. The company has implemented financial measures, such as a share premium and capital reduction, to mitigate losses, but the situation remains precarious.

Telefónica has been reducing its presence in Hispanoamerica for many years, including major markets like Mexico. Outside its profitable and growing Brazilian operations there are rumours it will reduce its presence across the region.

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Telefónica has accelerated talks with potential buyers, including investors Carlos Torres and Eduardo Barriga, who are interested in acquiring the business. However, negotiations have stalled due to financial disagreements. The company is also exploring the appointment of a new CEO with expertise in sales and liquidations to manage the sale.

The sale of the Peruvian subsidiary was being planned during the tenure of José María Álvarez-Pallete, Telefónica's former CEO. However, with the arrival of Marc Murtra at the start of 2025, there is a possibility that the company might reconsider or delay the divestment. This indicates a potential shift in strategy under new leadership.

The potential sale in Peru coincides with Telefónica's consideration of divesting its operations in Argentina, as part of a broader strategy to reorient its investments in more competitive markets. The outcome of these negotiations could mark a significant shift in Telefónica's presence in South America.

Telefónica retains its towers in Chile and Argentina and is a major tenant across LATAM to many of the region's towercos. For example Telefonica is responsible for 10% of American Tower's international property revenue. Telefónica's exit or consolidation could lead to a period of disruption and decommissioning. On the other hand the entrance of a new investor keen to grow on Telefónica's legacy could breathe new life into the markets.

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