Telef ó nica | Spanish Telecommunications Company

Telefonica's strategy relies on two axes: our corporate mission (to make our world more humane by connecting people's lives) and our responsible business principles, including Telefonica's key beliefs and responsible policies towards key stakeholders and society as a whole.

Looking ahead, Telef ó nica's strategy is based on three pillars:

The positive impact of digitization on progress that benefits economic and social development:

Our clients realize how important communication services are in their daily lives. Telef ó nica meets this societal demand by developing efficient telecommunications infrastructure on the basis of new, faster, and higher capacity networks, which is crucial for long-term progress. Strengthening the digitalization of companies and enterprises is a prerequisite for enhancing competitiveness. Telef ó nica is committed to helping small and medium-sized enterprises transform by expanding their communication service offerings through specific IT solutions tailored to their needs.

Our customers also need trust when using our network and various related network services. Telef ó nica has implemented state-of-the-art physical and logical security protocols on its network to ensure service security. Telef ó nica has also renewed its Digital Agreement, under which it promises customers to use their data responsibly with transparency and the consent of the ultimate data owner (our customers).

Telef ó nica recognizes the importance of training personnel for this new digital world and the challenges involved. In the coming years, digitization will have a powerful impact on the workplace, requiring new digital skills, new professional profiles, and adapting to the emergence of new professions. This requires us to firmly commit to continuously training our main asset: our employees.

Building a greener future through the development of ecological sustainability initiatives:

Telef ó nica is aligned with the global goal of reversing climate change. We recognize the increasing importance of ecological sustainability to our society and have developed plans to reduce business impact and help customers achieve ecological transformation.

Internally, Telef ó nica has deployed state-of-the-art networks (fiber optic, 5G) that are much more efficient in terms of energy consumption and ecological footprint than its predecessor. A specific plan has been formulated to achieve carbon neutrality in Telef ó nica's business in the coming years.

Telef ó nica is also a major service provider that helps our clients (primarily businesses) reduce their environmental impact. By digitizing internal processes, enterprises can improve energy efficiency and avoid unnecessary emissions. Telef ó nica's services help customers in different ways: by reducing travel needs (such as working from home, audio/video conferencing, cloud services, etc.), automating processes (such as using the Internet of Things), and optimizing internal resources (such as using big data solutions).

Telef ó nica collaborates with our suppliers and partners to promote the transition towards a more sustainable circular economy based on recycling. We have developed a plan for recycling and reusing materials (primarily electronic and customer devices related to network deployment) in all operations.

Lead by example in all our activities:

As Spain Telecom moves towards digitization, it needs the best digital talent. Promote diversity and inclusivity among employees, ensuring optimal conditions for attracting, cultivating, and retaining talent. Telef ó nica guarantees equal employment opportunities and is committed to increasing the number of women in its management structure in accordance with government goals, thereby eliminating wage gaps.

Telef ó nica believes that promoting the sustainability and reliability of its supply chain is crucial. To this end, it has extended its action principles to suppliers and suppliers, resulting in a positive impact on its responsibilities beyond its business scope and reducing the risk of third-party activities on its own reputation

Telef ó nica hopes to play a leadership role in trust and reputation in every society it operates in. The foundation of this trust lies in assuming all our principles of action in every process, culture, and projection to the outside world of the company through transparency, clarity, reliability, and consistency.

Key operational decisions:

Focus on the four major telecom operators (Spain, Germany, UK, and Brazil):

The Spanish telecommunications group has readjusted its strategic focus, concentrating resources and investments on the most mature markets, stable economies, and markets where operators have strong and sustainable long-term market positions.

• The launch of Telef ó nica Tech:

This new enterprise aims to seize the growth of the digital services market to provide connectivity services to enterprise customers. The initial focus was on providing services in three businesses: network security, cloud and IoT/big data.

• Creation of Telef ó nica Infra:

The main purpose of establishing this new company is to develop valuable infrastructure for Telef ó nica and add value to it, utilizing the current interest in market investment to establish a structure open to third parties. Therefore, Telef ó nica Infra is developing new future projects to accelerate the deployment of ultra wideband in the geographical areas where it operates.

• Strategic revision of our asset management model in Latin America:

Focused on differentiated management of HispAm, the operational spin off of the asset has been completed. The main goal of Telef ó nica is to create options for the group, seize growth opportunities in the region, accelerate infrastructure development, and reduce the macroeconomic risks we face.

• New operating model:

The acceleration of digitalization initiatives in various operational departments of the group will gain synergies from process simplification and automation. In addition, the company center has undergone restructuring and its scale is shrinking to focus on activities that can provide differential value to operators, maximize synergies, and realize the scale value of Telef ó nica.