Mission Statement, Vision, & Core Values of Telefónica, S.A. (TEF)

Telefónica, S.A. (TEF) is defintely not just a legacy telecom; its strategic direction, defined by its Mission and Vision, is directly tied to financial discipline, evidenced by the €27.6 billion net debt reduction and a commitment to keeping Capital Expenditure (CapEx), or investment spending, intensity below 12.5% in the 2025 fiscal year. That focus on profitable scale-their Vision-is what separates a successful turnaround from a slow decline. You're watching the company execute its new Transform & Grow 2026-2030 strategic plan, but how exactly do the core values like Challenge your limits translate into the modest 1.5% to 2.5% Compound Annual Growth Rate (CAGR) they forecast for revenue?

Telefónica, S.A. (TEF) Overview

Telefónica, S.A. is a Spanish multinational telecommunications giant, founded in 1924 in Madrid as Compañía Telefónica Nacional de España (CTNE). The company's history is a clear map of Spain's technological evolution, starting as a state-owned monopoly before its full privatization in the late 1990s, which fueled its aggressive expansion across Latin America. That early move was defintely a game-changer.

Today, Telefónica is a diversified provider of integrated telecommunications services across Europe and Latin America, operating under major brands like Movistar, O2, and Vivo. Its core business spans mobile and fixed-line communication, broadband internet, and digital television, plus a growing suite of enterprise solutions.

The company's current sales reflect its global scale, with a Trailing Twelve Months (TTM) revenue as of November 2025 standing at approximately $42.19 Billion USD. This figure captures the scale of their operations, from consumer mobile services to complex digital solutions for businesses. To dig deeper into the company's foundation and strategy, you can find more information here: Telefónica, S.A. (TEF): History, Ownership, Mission, How It Works & Makes Money.

2025 Financial Performance: Growth in Core Markets

Looking at the latest financial reports, Telefónica's strategy of focusing on core markets and high-growth digital services is paying off, despite some currency headwinds. The company's revenue for the first nine months of 2025 reached €26,970 million, demonstrating an organic growth of 1.1%. This steady organic growth is a sign of disciplined execution.

What's driving this? It's the B2B and wholesale segments. Here's the quick math on where the growth is concentrated, based on Q3 2025 results:

• B2B Revenue: Grew 4.2% to €2.020 billion in Q3 2025.
• Wholesale Revenue: Rose 8.0% to €1.616 billion in Q3 2025.
• Telefónica Tech: This digital services unit, focusing on cybersecurity, Cloud, and Internet of Things (IoT), saw H1 2025 revenues of €1,074 million, up 9.6% year-over-year.

Regionally, the core markets are strong. Telefónica España saw a Q3 2025 revenue increase of 1.6% to €3.233 billion, achieving its highest fixed broadband net gain in nine years. Telefónica Brasil reinforced its market leadership with revenues climbing 6.5% in local currency to €2.349 billion in the same quarter.

Telefónica: A Leader in Digital Infrastructure

Telefónica is not just a traditional telecom company anymore; it's a leader in next-generation digital infrastructure and services. This is crucial for long-term value creation. The company's commitment to fiber and 5G is a huge competitive advantage.

As of Q3 2025, Telefónica has a massive footprint in ultra-broadband, with 172.1 million premises passed, including 82.6 million Fiber-to-the-Home (FTTH) premises. Their 5G coverage now spans 78% of the population in its core markets. Plus, the company has consolidated its position as a global leader in the Internet of Things (IoT) connectivity, exceeding 51 million active connections worldwide as of September 2025, with a staggering 163% year-on-year growth in the Spanish IoT market. This is where the future revenue is coming from, so you need to pay attention to these digital segments. To understand the strategic pillars underpinning this success, you should explore the company's mission and values in the next sections.

Telefónica, S.A. (TEF) Mission Statement

You're looking for a clear line of sight on where Telefónica, S.A. is headed, especially with the strategic shifts announced at the November 2025 Capital Markets Day. The mission statement is your compass, and for Telefónica, S.A., it's precise: Telefónica, S.A. (TEF): History, Ownership, Mission, How It Works & Makes Money. Their mission is to deliver the best digital experience to all our customers by providing connectivity and advanced services tailored to their needs.

This isn't just corporate fluff; it's the operational mandate that guides their investment of billions of Euros and their strategic 'Transform & Grow' plan. It fundamentally breaks down into three core, actionable components: delivering best-in-class connectivity, innovating with advanced services, and tailoring those offerings to the customer's specific needs. The long-term success of any telecom company, defintely one of this scale, rests on how well they execute on these three fronts.

Delivering the Best Digital Experience: The Connectivity Foundation

The first component is the bedrock of any telecom: superior connectivity. If the network isn't world-class, the digital experience is a bust. Telefónica, S.A. translates this mission component into a measurable commitment to infrastructure investment, or Capital Expenditure (CapEx), even as they seek efficiency.

Here's the quick math on their commitment: the company has confirmed a CapEx-to-Sales ratio target of less than 12.5% organic for the 2025 fiscal year, a disciplined approach that still funds massive network expansion. This investment underpins the quality for a customer base that reached 348.6 million accesses as of the second quarter of 2025. You can't service that many connections without serious network muscle.

• Connect over 348.6 million customers.
• Expand fiber-to-the-home (FTTH) to 81.4 million premises passed.
• Maintain 5G coverage at 77% across core markets.

Their focus is on performance, which they aim to boost further with significant investment in Artificial Intelligence (AI) to improve network performance and customer service across all channels. They are building an autonomous network.

Advanced Services and Tailored Needs: The Digital Transformation

The second core component moves beyond basic connectivity into the high-margin, high-growth areas of the digital economy-the 'advanced services tailored to their needs.' This is where the company shifts from being a utility provider to a digital partner, especially for businesses (B2B).

The financial results for the first nine months of 2025 show this strategy is gaining traction. The company reported sales of €26,970 million for the nine months ended September 30, 2025, with organic growth in revenues. This growth is driven by segments like B2B, where they are modernizing communication services in core markets like Spain and Brazil and accelerating the growth of digital services through their tech unit, Telefónica Tech. The focus is on fully softwarized offerings and scaling the B2B segment to drive revenue growth.

The goal is simple: solve complex business problems, not just provide a phone line.

Commitment to Society: The Human-Centric Purpose

The final, and perhaps most differentiating, component of the mission is the underlying purpose: to make the world 'more human.' This is the ethical and societal orientation, a critical factor for institutional investors evaluating Environmental, Social, and Governance (ESG) performance.

This commitment is formalized in the company's 2023-2025 Responsible Business Plan, which directly links their operations to sustainability and digital inclusion. For instance, the company is committed to achieving net zero carbon emissions and continues to source 100% green electricity. For you as an analyst, this is a tangible risk mitigator and a long-term value driver; a company that manages its environmental impact and social license to operate is a more resilient investment.

Their societal commitment is not abstract; it's about expanding digital access and ensuring customers retain sovereignty over their data, acting in accordance with all applicable laws and ethical values.

Telefónica, S.A. (TEF) Vision Statement

You're looking for the true north of Telefónica, S.A., and that's smart. A company's vision and mission aren't just boilerplate; they map the capital allocation strategy. Telefónica's vision, as articulated in its recent 'Transform & Grow' strategic plan, is clear: Become a world-class European Telco with profitable scale. This isn't just about size; it's a precise focus on efficiency, core markets, and sustainable returns, which is defintely what we should be watching.

The mission that drives this vision is to deliver the best digital experience to all its customers by providing connectivity and advanced services tailored to their needs. Honestly, that's the operational translation of their more human-centric purpose: to make our world more human by connecting lives. The six strategic pillars of the new plan show you exactly how they plan to achieve that profitable scale, especially against the backdrop of their Q1 2025 net income of €427 million from continuing operations.

Pillar 1: Delivering the Best Customer Experience

In a saturated market, customer experience is the real differentiator, so Telefónica is making it a core pillar. This means going beyond just providing a signal; it's about service quality and network performance, driven by significant investment in Artificial Intelligence (AI). They have a massive base of 348.6 million customers as of Q2 2025, and keeping them happy is cheaper than acquiring new ones.

The focus here is on leveraging AI to strengthen both network performance and customer care across all channels. Here's the quick math: if they can reduce churn by just 1% across their core markets-Spain, Germany, the UK, and Brazil-that directly impacts their target of 1.5-2.5% Compound Annual Growth Rate (CAGR) in revenues between 2025 and 2028.

Pillar 2: Expanding the B2C Offering

The consumer (B2C) segment is a key growth engine. Telefónica is reinforcing convergence in Spain and Brazil, and expanding that model in the UK and Germany. Convergence means bundling mobile, fixed, and digital services into one package, making it stickier for the customer and boosting Average Revenue Per User (ARPU). This B2C boost helped drive a 1.3% organic revenue increase in Q1 2025.

The company is accelerating its digital ecosystem services to grow B2C revenues and household presence. This is a smart move, as it leverages their existing infrastructure-like the 81.4 million premises passed with fiber as of Q2 2025-to offer higher-margin services beyond basic connectivity.

Pillar 3: Scaling the B2B and Public Administration Business

The business-to-business (B2B) and public administration segment is where the real margin expansion lies in the near term. This pillar is focused on modernizing communication services in Spain and Brazil, but the big opportunity is accelerating growth in digital services through Telefónica Tech.

Telefónica Tech, their digital services unit, is the growth engine here, offering cloud, cybersecurity, and IoT (Internet of Things) solutions. The goal is to seize opportunities in the UK and Germany by leveraging these digital services and local partnerships. This shift is critical for achieving the projected 1.5-2.5% CAGR in adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) through 2028.

Pillar 4: Evolving Technological Capabilities

You can't be a world-class telco without best-in-class technology, so investment in fixed and mobile networks is non-negotiable. This means upgrading IT systems and focusing innovation on technologies that enhance their product portfolio.

The company is expanding its next-generation networks, with 5G coverage already reaching 77% in its core markets. What this estimate hides is the CapEx (Capital Expenditure) constraint. Telefónica is committed to keeping its CapEx/Sales ratio below 12.5% for 2025, which means they have to be highly efficient with their technology spend. They have to innovate, but they have to do it on a budget.

Pillars 5 & 6: Simplifying the Operating Model and Developing Talent

These last two pillars are the operational bedrock. Simplifying the operating model means granting greater autonomy to countries and global units, which should achieve tangible, measurable efficiencies. The plan targets operational efficiency improvements of up to €2.3 billion in savings by 2028.

Developing talent is about attracting and retaining the best professionals and strengthening a culture focused on impact and execution. Their cultural attitudes-Give your best, Challenge your limits, and Rise together-are the human capital strategy for a simplified, high-impact organization. The dividend confirmation of €0.30 per share for 2025, payable in two tranches, shows their commitment to shareholder value while executing this transformation.

If you want to dive deeper into who is buying into this vision and why, you should be Exploring Telefónica, S.A. (TEF) Investor Profile: Who's Buying and Why?

Telefónica, S.A. (TEF) Core Values

You need to know where Telefónica, S.A. is putting its money and its focus to understand the investment thesis. The company's strategic direction, formalized in its November 2025 Capital Markets Day, centers not just on financial targets but on a high-impact culture defined by three core attitudes. These aren't just posters on a wall; they are the operational pillars that drive their new Transform & Grow plan and underpin their goal to become a world-class European telco with profitable scale. For a deeper look at their foundation, you can check out Telefónica, S.A. (TEF): History, Ownership, Mission, How It Works & Makes Money.

The near-term focus is clear: accelerate organic growth and simplify operations. The company is defintely putting its capital where its values are, which is critical for long-term shareholder value creation.

Give Your Best (Commitment and Trust)

This value is about operational excellence and building trust with every customer interaction, which means delivering on promises and securing their digital life. Telefónica views trust as a non-negotiable asset, especially in the volatile telecom sector. This commitment is evident in their 2025 financial guidance, which they reiterated throughout the year, confirming a cash dividend of €0.30 per share for 2025, payable in two tranches. Meeting that target is a fundamental act of trust with shareholders.

The focus on security and transparency is also a direct extension of this value. The company's total tax contribution for fiscal year 2024 was €8.4 billion, a number that demonstrates a significant, transparent socioeconomic impact in the markets where they operate. This value also drives their network performance, which is the core product. By Q1 2025, their fiber-to-the-home (FTTH) network had reached 80.0 million premises passed, showing a clear, measurable commitment to delivering the best connectivity.

• Deliver on financial commitments, like the €0.30 2025 dividend.
• Invest in network quality for a better customer experience.
• Ensure financial transparency and a significant tax contribution.

Challenge Your Limits (Innovation and Boldness)

To be a leader in the digital future, you can't just maintain the status quo; you have to take calculated, intelligent risks. This value is the engine for Telefónica's technological transformation and is best seen in their aggressive network modernization and digital services push. They are not waiting for the market to move; they are driving it.

For example, in Q1 2025, Telefónica opened a dedicated Centre of Excellence for Quantum Technologies, focusing on practical applications in cybersecurity and network optimization. That's a bold, long-term bet on a disruptive technology. Furthermore, their 5G coverage in core markets reached 77% by Q1 2025, demonstrating a rapid deployment that challenges the limits of their existing infrastructure. The new Transform & Grow plan, unveiled in November 2025, projects a Compound Annual Growth Rate (CAGR) in revenues of 1.5-2.5% between 2025 and 2028, which is an ambitious growth target that requires them to continually challenge operational and technological limits.

Rise Together (Diversity and Sustainability)

This value is about collective growth-not just within the company, but with society and the environment. It recognizes that sustainable financial performance is inextricably linked to social and environmental impact. Honestly, this is where the ESG (Environmental, Social, and Governance) commitments translate into real-world action and risk mitigation.

On the 'Social' front, Telefónica set a clear target to increase female representation in management positions to 35% by 2025. Their current Board of Directors already demonstrates this commitment, with 40% female representation. On the 'Environmental' side, the company has a clear goal of achieving net-zero emissions across its value chain by 2040. Here's the quick math: to hit that, they are aggressively transitioning their energy mix. The share of electricity consumption covered by Power Purchase Agreements (PPAs) is on track to reach ~30% at the Group level in 2025, up from 22% in 2024. This dual focus on people and planet is a key differentiator in a capital-intensive industry.