Background on Telefónica and Millicom Spain
Telefónica, a major Spanish telecommunications company, has announced the sale of its Uruguayan subsidiary, Telefónica Móviles del Uruguay, to Millicom Spain for $440 million (approximately €389 million). This move aligns with Telefónica’s strategy, under president Marc Murtra, to reduce its exposure in Latin America—excluding Brazil.
Who are Telefónica and Millicom Spain?
Telefónica is a prominent telecommunications company based in Spain, operating in 24 countries across Europe and Latin America. It is the second-largest telecommunications company in the world by revenue, providing fixed and mobile telephony, broadband internet access, and digital TV services.
Millicom Spain is a Luxembourg-based telecommunications and technology company that operates in 10 countries across Latin America and Africa. It is the second-largest mobile operator in emerging markets, with a focus on rural areas and underserved communities.
The Sale of Telefónica Móviles del Uruguay
The sale of Telefónica Móviles del Uruguay, which operates under the Movistar brand, represents a step in Telefónica’s strategy to divest from several Latin American markets, including Colombia, Argentina, and Peru. Analysts believe that Millicom Spain will face minimal regulatory hurdles in acquiring the necessary permits, as it does not currently operate in Uruguay.
Movistar Uruguay’s Market Position
Movistar Uruguay is the second-largest mobile operator in the country, holding approximately 29% of market access as of March 2025. It trails behind the state-owned Antel and Claro, owned by Mexican billionaire Carlos Slim.
Telefónica Uruguay boasts a network coverage of 97% of the territory and offers significant 4G customer volume. The company holds licenses in the 850 MHz, 1900 MHz, and 700 MHz bands, enabling it to provide 2G, 3G, 4G, and 5G services.
Impact on Telefónica’s Latin American Operations
Telefónica’s Uruguayan operations have historically been part of its Latin American presence, which also includes Bolivia and Paraguay. The sale of its Uruguayan subsidiary allows Telefónica to strengthen its leadership position in the Latin American region.
The financial burden of Telefónica’s Argentine and Peruvian operations is evident in the account losses of €1.304 billion in Q1 2023, largely due to the €1.731 billion in write-downs for these two subsidiaries.
Conversely, Telefónica Brasil has shown positive growth in key business areas during January-March 2023, resulting in an 18% increase in profits to 1.100 billion reals (approximately €168 million). This success underscores Telefónica’s interest in deepening its presence in the Brazilian market.
Key Questions and Answers
- Who is buying Telefónica’s Uruguayan subsidiary? Millicom Spain
- What is the sale price? $440 million (approximately €389 million)
- Why is this sale significant for Telefónica? It aligns with Telefónica’s strategy to reduce exposure in Latin America, excluding Brazil.
- What is Telefónica’s market position in Uruguay? Movistar Uruguay is the second-largest mobile operator with approximately 29% market access.
- What challenges might Millicom Spain face in acquiring the necessary permits? Analysts predict minimal regulatory hurdles, as Millicom Spain does not currently operate in Uruguay.
- How does this sale impact Telefónica’s Latin American operations? The sale allows Telefónica to strengthen its leadership position in the region while divesting from underperforming markets like Argentina and Peru.
