Amid a long streak of losses in Latin America, Telefónica S.A. is selling its assets in the region, yet inexplicably announces an investment of USD 500 million in Venezuela. What explains such erratic behavior? A business vision? Apparently not. It seems to be influenced more by socialist loyalty to José Luis Rodríguez Zapatero—a great international mentor of Nicolás Maduro and his regime—acting as an intermediary.
In February, Telefónica reported on its website that it had met all of its financial goals for 2024 by reporting revenues of €41,315 million, reflecting a 1.6% growth for the year. However, the company reported to the Spanish National Securities Market Commission (CNMV) a decline in assets exceeding €2,000 million—some reports specify €2,336 million—distributed as follows:
- Argentina: €1,274 million with losses of €1,327 million;
- Chile: €397 million with losses of €437 million;
- Telefónica Tech: €243 million;
- Peru: €108 million with losses of €872 million (1).
This record translates to losses for Telefónica in Latin America amounting to €49 million (2). Despite this significant figure, it represents a 94.5% decrease from the €892 million experienced in 2023.
While this is Telefónica’s situation in the region, the Venezuelan case stands apart, as the company announced in February that it would invest USD 500 million in 5G technology and 4G network upgrades in Venezuela. The Business Wholesale and Public Affairs Director of Movistar, Rowil Contreras, clarified that Movistar’s 5G network would be developed using the “Dynamic Spectrum Sharing (DSS) scheme in the 2.600 MHz band, where the company already owned spectrum. According to Movistar’s president in Venezuela, José Luis Rodríguez Zarco, both the 4G and 5G investments signify significant capital, resulting in a larger number of connected individuals” (3).
Inexplicable Operations?
The latest announcement from Telefónica in Latin America pertains to the sale of Colombia Telecomunicaciones S.A. (Coltel), its subsidiary in Colombia, to Millicom Spain, S.L. for USD 400 million. Telefónica Hispanoamérica S.A., a wholly-owned subsidiary of Telefónica S.A., is selling 67.5% of Coltel’s capital, with the remaining shares retained by the Colombian state. Telefónica is set to concentrate its operations in Spain, Germany, the United Kingdom, and Brazil (4).
Just as inexplicable as the Venezuelan investment is the decision to sell Telecom Argentina for USD 1.245 billion. This sale is noteworthy first because it involves a company affiliated with Grupo Clarín, its main competitor, and second because this transaction occurs as the government of Javier Milei begins to rebound.
The Reasons
Javier de Paz, a protégé of José Luis Rodríguez Zapatero, was appointed president of Movistar+
What drives this behavior from Telefónica S.A.? Why invest in an unstable and inflationary economy like Venezuela’s? All signs point to an ideological rather than a financial motive, suggesting that Francisco Javier De Paz Mancho—simply Javier de Paz—was appointed president of Movistar+ replacing Sergio Oslé. This financial expert was also part of the board of directors of Indra—known for its poor reputation in Venezuela—among other groups. Additionally, he is a figure closely associated with the PSOE—joining the Socialist Youth in 1973 at the age of 15—and especially tied to José Luis Rodríguez Zapatero, who has been a decisive factor in his career. This indicates the paths the company may follow.
His wife was an assistant to Zapatero’s wife at the Moncloa. The relationship formed between the two families led the then Spanish Prime Minister to appoint him to the board of directors of Telefónica in 2006. Since then, his influence within the company has grown, making him the most powerful individual in Telefónica. It was to the point that when José María Álvarez-Pallete, the former president of Telefónica, attempted to remove him from the board, Paz confronted him, asserting that he would exit first—which indeed happened (5).
Not to mention Movistar Venezuela’s track record, which highlights a USD 5.26 million fine it had to pay in the United States following a corruption scandal that exposed bribery payments to officials of Nicolás Maduro’s regime to obtain preferential dollars (6).
See in Sin Filtros “Diosdado and Maduro Cornered: Richard Grenell and Mass Deportations”:
Consulted Sources:
1) Lacort, Javier. (March 13, 2025). “From the Latin American Dream to the Financial Nightmare: Telefónica Flees the Continent After Years of Losses”. In Xataka. Available at: https://www.xataka.com/empresas-y-economia/adios-latinoamericano-telefonica-murtra-acelera-ventas-continente-sangra-1-700-millones
2) Telefónica. (February 27, 2025). “Telefónica Increases Revenues to €41,315 Million in 2024 and Meets All Financial Goals”. Available at: https://www.telefonica.com/es/sala-comunicacion/prensa/telefonica-eleva-ingresos-hasta-41-315-millones-2024-cumple-todos-objetivos-financieros/
3) Yahoo! Finance. (February 5, 2025). “Telefónica Will Invest USD 500 Million in 5G Technology and 4G Network in Venezuela”. Available at: https://es-us.finanzas.yahoo.com/noticias/telef%C3%B3nica-invertir%C3%A1-500-millones-d%C3%B3lares-073000035.html
4) SWI. (March 13, 2025). “Telefónica Sells Its Colombian Subsidiary for About USD 400 Million”. Available at: https://www.swissinfo.ch/spa/telef%C3%B3nica-vende-su-filial-colombiana-por-unos-400-millones-de-d%C3%B3lares/89005632
5) Benítez, Jordi. (March 9, 2025). “Javier de Paz: From Apprentice of the Socialist Youth to the Powerful Man at Telefónica”. In El Debate. Available at: https://www.eldebate.com/economia/20250309/javier-paz-aprendiz-juventudes-socialistas-hombre-poderoso-telefonica_276910.html
6) SWI. (November 9, 2024). “Telefónica Venezuela Will Pay USD 85 Million in the U.S. for Bribery Case”. Available at: https://www.swissinfo.ch/spa/telef%C3%B3nica-venezolana-pagar%C3%A1-usd-85-millones-en-eeuu-por-caso-de-sobornos/88053375