Telefonica Advances Networks Transformation, Sets Targets for 2024

In a move towards the transformation of its next-generation intelligent networks, Telefonica announced significant strides in leveraging technologies such as Artificial Intelligence (AI) and Machine Learning (ML) to enhance operational efficiency and bolster its competitive edge.
Telefonica’s 5G network in SpainTelefonica CEO Jose Maria Alvarez-Pallete emphasized the pivotal role of AI and ML in enabling faster and more efficient decision-making processes, driving improvements in competitive positioning, capital expenditure (Capex) allocation, and cost savings.

This transformative process has accelerated the deployment of fibre and 5G networks while paving the way for the planned switch-off of the copper network, scheduled for April to coincide with Telefonica’s Centenary celebration.

Telefonica solidified its global leadership in fibre deployment, boasting coverage of 173.1 million premises passed with ultrafast broadband networks, marking a 3 percent increase. Notably, fibre connections surged by 14 percent, reaching a total of 74.3 million.

Telefonica’s 5G coverage witnessed significant expansion, with 87 percent population coverage in Spain, 94 percent in Germany, 48 percent in Brazil, and 51 percent in the UK. Additionally, Telefonica has already launched 5G+ services in Spain, Germany, and Brazil, with plans for the UK in the near future.

Closing 2023 with a base of 387.8 million accesses, Telefonica saw a notable uptick in fibre and mobile contract accesses by 13 percent and 3 percent, respectively.

Looking ahead to 2024, the company sets ambitious targets under its GPS strategic plan, aiming for revenue growth of approximately 1 percent, EBITDA growth between 1 percent and 2 percent, and operating cash flow (EBITDAaL-Capex) between 1 percent and 2 percent.

Telefonica forecasts a Capex over revenue figure of up to 13 percent and anticipates a free cash flow increase of more than 10 percent.

In 2023, Telefonica reported annual revenues of €40,652 million, marking a 1.6 percent increase compared to 2022. Notably, fourth-quarter revenues of Telefonica stood at €10,153 million.

The company’s Business-to-Business (B2B) segment emerged as a significant growth driver, with organic revenue growth of 6.3 percent for the full year, underscoring Telefonica’s commitment to diversifying revenue streams.

Telefonica’s net income surged to €2,369 million for the full year, reflecting a remarkable 17.1 percent increase compared to 2022, affirming the company’s strong financial performance and strategic vision for the future.