Telefónica, S.A. (TEF): Business Model Canvas [Dec-2025 Updated]

You're looking to really understand how a major European telecom giant like Telefónica, S.A. (TEF) is navigating the shift from legacy infrastructure to digital services, and honestly, it's a fascinating pivot. As someone who's spent two decades mapping these complex plays, I can tell you their strategy hinges on disciplined focus: doubling down on core European markets while aggressively scaling Telefónica Tech for corporate clients. With H1 2025 revenue from continuing operations hitting €18.013 billion, the numbers back up this transformation, even as they manage a net financial debt of €27.6 billion as of mid-year. To see exactly how they structure their partnerships, resources, and revenue streams to pull this off, check out the full Business Model Canvas breakdown we've laid out below.

Telefónica, S.A. (TEF) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Telefónica, S.A. (TEF) relies on to build and deliver its value propositions. These alliances are capital-intensive and technology-dependent; they define the scale and scope of their network and content reach.

Infrastructure Joint Ventures (JVs) for Fiber Deployment

Telefónica, S.A. (TEF) partners to share the massive capital expenditure required for fiber rollout, particularly in wholesale-focused entities. In the UK, nexfibre, a JV with Liberty Global and InfraVia Capital Partners, is building a wholesale fiber-to-the-home (FTTH) network. Telefónica Infra holds a 25% stake in this JV, which aims for up to 7 million premises passed, with an investment of approximately £4.5 billion, supported by up to £1.4 billion in equity commitments. As of March 2025, nexfibre had already reached 2.3 million premises passed.

In Spain, the rural-focused fiber JV, Bluevía Fibra, is a partnership with Crédit Agricole Assurances and Vauban Infrastructure Partners, where Telefónica Group retains a controlling 55% stake. Bluevía started with 3.5 million premises passed and aimed to reach 5 million premises by 2024, valuing the entity at €2.5 billion. Furthermore, Telefónica, S.A. (TEF) is working with rival Vodafone Spain on another fiber JV, Fiberpass, covering 3.6 million premises, where Telefónica holds the largest stake at 50%.

The scale of Telefónica, S.A. (TEF)'s owned network in Spain was reported at 30.2 million premises at the end of June 2024, including Bluevía's footprint. The company is targeting 100% fibre coverage in Spain by the end of 2025.

Strategic Alliances for 5G Network Technology

For the core mobile network build-out, Telefónica, S.A. (TEF) maintains long-term relationships with key vendors. In Spain, the 5G radio network deployment for the 3.5GHz and 700MHz bands is shared between Nokia and Ericsson, with both sharing usage equally until 2026. This partnership began with initial deployment in Segovia and Talavera de la Reina. Separately, Telefónica Germany extended its Radio Access Network (RAN) deal with Nokia for five years, running until 2030, to advance 5G expansion using Cloud RAN solutions. Also, Telefónica and Nokia signed a strategic agreement for the next three years to accelerate private 5G networks for Spanish businesses.

Cloud Collaborations for B2B Solutions

Telefónica Tech leverages alliances with hyperscalers to deliver digital transformation services to its corporate customers. Telefónica and Microsoft are expanding their collaboration to migrate Telefónica's core AI-driven platform, Kernel, to Azure as a Software as a Service (SaaS) offering. Telefónica Tech has achieved recognition as an Microsoft Azure Expert Managed Services Provider for a second year running. For Amazon Web Services (AWS), Telefónica Tech is an Advanced Consulting Partner, possessing over 30 AWS certified staff. Telefónica Business Solutions currently offers Microsoft Azure services to customers in Argentina, Brazil, Chile, and Spain.

Content Agreements for Bundled Services

Content partnerships are used to enhance the value of consumer bundles, primarily through the Movistar+ platform. The alliance with Netflix was extended until 2026. Under a previous iteration of this deal, 35 percent of existing Movistar Fusion subscribers chose to contract Netflix. For its UK operations (O2), Disney+ is offered as an Extra, which can be included for up to 6 months on certain Pay Monthly plans.

Wholesale Partners Utilizing the Fiber Network

The fiber infrastructure is monetized through wholesale arrangements with other operators. In Spain, Telefónica, S.A. (TEF) is reportedly finalizing an Indefeasible Right of Use (IRU) agreement with MásOrange, which would grant access to 3.5 million homes and business premises on Telefónica's network, including Bluevía's. Additionally, Vodafone Spain's new wholesale agreement with Telefónica, S.A. (TEF) covers 3.5 million premises. Telefónica also renewed a ten-year wholesale deal with Digi Spain.

The table below summarizes key infrastructure partnership metrics:

JV/Partner	Market	Telefónica Stake	Premises Passed (Reported/Target)	Key Financial/Term
Bluevía Fibra (w/ CAA/Vauban)	Spain (Rural)	55%	5 million target	Valuation of €2.5 billion
nexfibre (w/ Liberty/InfraVia)	UK	25%	2.3 million passed (March 2025)	Investment up to £4.5 billion
Fiberpass (w/ Vodafone Spain)	Spain	50%	3.6 million premises coverage	Part-monetisation structure
Ericsson/Nokia	Spain (5G Radio)	N/A	Shared bands until 2026	Long-term contract

Telefónica Tech maintains over 6,500 technology certifications across its partner ecosystem.

Finance: draft 13-week cash view by Friday.

Telefónica, S.A. (TEF) - Canvas Business Model: Key Activities

You're looking at the core actions Telefónica, S.A. is taking to drive value right now, late in 2025. It's a mix of heavy infrastructure work and sharp digital service expansion, all while streamlining the footprint.

Deploying and operating state-of-the-art fiber and 5G networks.

The network build-out remains a massive activity. Telefónica, S.A. is focused on its core markets, maintaining global leadership in fiber deployment behind only Chinese operators. As of the first half of 2025, the company reported 81.4 million FTTH Premises Passed (PPs), an increase of 11% year-on-year. In the first quarter alone, an additional 1.5 million premises were deployed. Total accesses across the group stood at 348.6 million as of June 2025, virtually stable year-on-year (-0.2%). On the mobile side, 5G Stand Alone core is fully deployed across all core markets. Specific 5G coverage as of June 2025 was 94% in Spain, 98% in Germany, 64% in Brazil, and 78% in the UK. Telefónica España is leading the country's mobile networks, covering 2,000 towns with high-performance 5G (3,500MHz). They also completed the retail copper network switch-off in Spain.

Expanding B2C and scaling B2B digital services (Telefónica Tech).

The push into digital services is clearly paying off in growth terms, even as reported group revenue faces currency headwinds. Telefónica Tech, the dedicated digital services division, posted revenues of €1,074 million for the first half of 2025, marking an increase of 9.6% compared to 2024. For the second quarter specifically, Telefónica Tech revenues hit €566 million, representing year-on-year growth of 12.5%. In Q1 2025, digital services across B2C and B2B combined had already increased +23.5%, making up 11% of the company's total revenue. Looking at the core segments in H1 2025, B2C revenue grew 2.0% year-on-year, while B2B revenue grew 5.1% year-on-year.

Simplifying the operating model for tangible, measurable efficiencies.

Simplification is about financial discipline and getting more from the existing structure. The company confirmed its 2025 financial targets, which include a CapEx/Sales target of less than 12.5%. In Q1 2025, the CapEx/Revenue ratio was 13.0%, a reduction of 0.9 p.p. year-on-year. Group EBITDA for the first half of 2025 reached €5,867 million, with an organic growth of 0.8%. The reported EBITDA margin for H1 25 was 32.6%. The overall group revenue for H1 25 was €18,013 million, showing an organic growth of 1.5%.

Investing in innovation: AI, IoT, and cloud computing platforms.

Innovation investment is channeled heavily through Telefónica Tech. Cloud services within the B2B segment saw strong traction, with growth of +38.3% in Q1 25. In the Internet of Things (IoT) space, they are applying artificial intelligence to improve remote lighting management, achieving energy savings of up to 30%. For AI and Data, the company strengthened its capabilities through new alliances with partners like Confluent and Collibra.

Managing portfolio, like Hispam asset disposal for deleveraging.

The strategic exit from most of the Hispam region is a major activity for balance sheet management. Telefónica, S.A. has decisively reduced exposure to volatile currencies through divestments. Telefónica Argentina was deconsolidated starting February 24, 2025, and Telefónica Peru on April 13, 2025. The sale of the Argentine business unit to Telecom Argentina was for US$1.25bn. Agreements were reached to sell Uruguay for US$440 million (€389 million) and Colombia for US$400 million. These asset disposals resulted in a €2.1 billion P&L hit in H1 2025, mostly non-cash, but generated cash proceeds of ~€1.9 billion to help fund operations. This follows a trend where net debt dropped from €41 billion in 2019 to €27.3 billion by the end of 2024 due to asset sales.

Key Activity Metric	Unit/Period	Value
Total Accesses	Jun-25	348.6 million
FTTH Premises Passed (PPs)	H1 25	81.4 million
5G Coverage in Spain	Jun-25	94%
Telefónica Tech Revenue	H1 25	€1,074 million
Telefónica Tech Revenue Growth (y-o-y)	Q2 25	12.5%
B2B Revenue Growth (y-o-y)	H1 25	5.1%
Group Organic Revenue Growth	H1 25	+1.5%
Group EBITDA Margin	H1 25	32.6%
Argentina Asset Sale Value	Completed 2025	US$1.25bn
Uruguay Asset Sale Value (Agreed)	May 2025	US$440 million

Finance: review the impact of the ~€1.9 billion cash proceeds on the Q3 deleveraging target by end of week.

Telefónica, S.A. (TEF) - Canvas Business Model: Key Resources

You're looking at the core assets that power Telefónica, S.A. (TEF)'s operations as we head into late 2025. These aren't just line items; they are the actual competitive advantages that underpin their strategy.

Extensive fixed and mobile network infrastructure, including 5G.

The physical network remains the bedrock. As of the first half of 2025, Telefónica, S.A. maintained a massive footprint with 348.6 million total accesses across its operations. The commitment to fiber is clear, passing more than 171 million premises with ultra-broadband networks. Within that, 81.4 million are FTTH (Fiber to the Home) connections, with 29 million of those coming through Telefónica's dedicated fiber vehicles. On the mobile front, the 5G rollout is aggressive, especially in Spain, where coverage reached over 94 percent of the population by late October 2025. That Spanish 5G footprint includes 5,000 localities on the 700 MHz band and nearly 3,000 municipalities with the high-performance 5G+ on the 3.5 GHz band. Honestly, the move to autonomous networks (AN) is a key internal resource focus; they've hit an average autonomy level of 3.05 mid-year, aiming for Level 4 by 2030. Also, the decommissioning of legacy 3G in Spain is targeted for 2025 to free up spectrum and resources.

Here's a quick look at the network scale and progress:

Metric	Value as of H1 2025 / Late 2025	Notes
Total Customer Accesses	348.6 million	Group total accesses.
Ultra-Broadband Premises Passed	Over 171 million	Total fiber footprint.
FTTH Premises Passed	81.4 million	Subset of ultra-broadband.
Spain 5G Population Coverage	Over 94 percent	As of late October 2025.
Network Autonomy Level (Mid-2025)	3.05	Targeting Level 4 by 2030.

Strong regional brands: Movistar, Vivo, and O2.

The brand equity in core markets is a significant intangible asset. The markets of Spain and Brazil, anchored by the Movistar and Vivo brands respectively, are central to the group's financial health, contributing 70 percent of group EBITDA in the first half of 2025. The O2 brand continues to be a key player in markets like Germany and the UK. The B2C revenue growth in Q2 2025, which grew by 2.1 percent year-on-year to €5,323 million, reflects the strength of these value propositions.

Spectrum licenses for mobile network operations.

Spectrum holdings are finite and critical for mobile service delivery. Telefónica, S.A. is actively managing its portfolio, including a recent strategic move in the UK. The company agreed to acquire 78.8 megahertz of spectrum from Vodafone UK for £343,000,000, which will boost their total mobile spectrum share in the UK to around 30 percent. In Germany, existing licenses for the 800MHz, 1800MHz, and 2.6GHz bands are partially set to expire at the end of 2025, necessitating renewal planning. For context on past investments, Telefónica spent approximately EUR 107 million for 50-megahertz in Spain's 3.6-3.8 GHz auction back in 2018. Furthermore, financed payments for spectrum licenses amounted to €47 million in the first half of 2025.

Key spectrum considerations as of late 2025:

• UK acquisition: 78.8 MHz for £343 million.
• German licenses expiring: 800MHz, 1800MHz, and 2.6GHz at end of 2025.
• Peru 5G spectrum valuation: Each 100MHz block valued at US$127mn.
• H1 2025 spectrum financing payments: €47 million.

Data and AI platforms for network management and customer insights.

The push into digital solutions is resource-intensive, relying heavily on advanced platforms. Telefónica Tech launched its Generative AI (GenAI) platform on January 28, 2025, designed to help enterprise customers build virtual assistants using multiple Large Language Models (LLMs). This platform evaluates models on cost, performance, and latency. Internally, the company's AI Centers of Excellence (COE) in Spain, Brazil, and Germany, established about two years prior, centralize use cases and set governance for network autonomy efforts. The strategic plan anticipates significant returns from this focus, projecting operational efficiency savings of up to €2.3 billion by 2028 and €3 billion by 2030 through AI-driven innovation and process streamlining. That's a serious commitment to digitalizing operations.

Net financial debt of €27.6 billion as of June 30, 2025.

Financial structure is a key resource, providing the capacity for investment and stability. As of June 30, 2025, the reported net financial debt stood at €27,609 million, representing a 5.5 percent year-on-year reduction. This reduction was achieved despite typical first-half seasonality, with Free Cash Flow (FCF) reaching €291 million for the first six months. The company also maintains a solid liquidity position, with undrawn committed credit facilities totaling €10,049 million as of that date. Management has indicated a path to further reduce this leverage, targeting a net debt of €26.0 billion following the completion of announced asset sales.

Finance snapshot at mid-2025:

Financial Metric	Amount as of June 30, 2025	Change Y-o-Y
Net Financial Debt	€27,609 million	Down 5.5 percent
FCF (H1 2025)	€291 million	Reflects seasonality
Undrawn Committed Credit Facilities	€10,049 million	Maintains ample liquidity
Target Net Debt (Post-Sales)	€26.0 billion	Future goal

Finance: draft 13-week cash view by Friday.

Telefónica, S.A. (TEF) - Canvas Business Model: Value Propositions

You're looking at the core value Telefónica, S.A. delivers to its customers, which is increasingly about bundling connectivity with digital services, especially in the core markets. This focus is clearly reflected in their 2025 performance metrics.

Convergent offering: fixed, mobile, TV, and digital services bundles.

Telefónica, S.A. continues to push its convergent offer as a key differentiator, which helps keep customers sticky. The strategy is about driving a higher average revenue per user (ARPU) while keeping churn low. For instance, in the first quarter of 2025, the convergent base grew by 0.5% year-over-year, adding 5k customers in that period alone. This is supported by strong pricing power, as the contract ARPU (Average Revenue Per User) saw a +1.9% year-over-year increase in Q1 2025. The success of this bundling is evident in the low churn rate, which remained stable year-over-year at 1.1% in Q1 2025, confirming that the value proposition is resonating well above the market average for those bundled customers.

Looking ahead, the ambition is clear:

• Target convergence over the fixed broadband base to reach 74% by 2028.
• Elevate B2B revenues to constitute 26% of group revenues by 2028.

State-of-the-art, reliable, and safe telecommunications services.

Reliability centers on next-generation network expansion, particularly fiber-to-the-home (FTTH) and 5G deployment. You see this investment translating into customer satisfaction metrics. In Q1 2025, the total customer base stood at 354 million accesses, with FTTH accesses showing strong growth at +13% year-over-year, making up 96% of all Fixed Broadband (FBB) accesses. By Q2 2025, the total access count was 348.6 million, virtually stable year-over-year. To measure the service quality, the Net Promoter Score (NPS) hit a new high of 35 in Q1 2025. The company has a forward-looking goal to increase NPS by an average of six points by 2028, with a specific target for Spain to reach an MPS of 61, comparable to leading tech companies.

Here's a snapshot of the network footprint as of mid-2025:

Metric	Latest Reported Figure (2025)	Context/Period
Fiber Premises Passed (Total)	81.4 million	Q2 2025
Fiber Premises Passed Growth	Up 1.5 million	Q2 2025 (Quarter-over-Quarter)
Net Promoter Score (NPS)	35	Q1 2025

Digital transformation solutions via Telefónica Tech for corporates.

Telefónica Tech is a major value driver, focusing on Cybersecurity, Cloud, and Big Data & IoT for the enterprise segment. This unit is definitely on a growth tear. In the second quarter of 2025, Telefónica Tech reported revenues of €566 million, marking a strong year-on-year growth of 12.5%. For the first half of 2025, the unit achieved revenues of €1,074 million, which is a 9.6% increase over the same period in 2024. This growth is supported by key sectors, where public services, financial services, and healthcare together accounted for nearly 40% of total sales in H1 2025. The company is aiming high, having surpassed €2 billion in revenue in FY24, with a stated target to reach €3 billion in total revenue by FY26.

Concrete examples of digital value include:

• IoT solutions using AI on the Smart Steps platform achieved energy savings of up to 30% in remote lighting management.
• B2B revenue in Q1 2025 grew 5.4% year-over-year, reaching €2,043 million.

Network leadership with 5G coverage at 78% in core markets.

Network leadership is quantified by the rollout of 5G technology in the core markets (Spain, Germany, UK, Brazil). As of the third quarter of 2025, 5G coverage reached 78% across these core markets. This represents an increase from 75% coverage reported in Q1 2025. To give you a specific example of market leadership, Telefónica's coverage in Spain reached 94% of the population as of late October 2025. Germany, operating as O2, was targeting full nationwide 5G coverage by the end of 2025.

Personalized service and proactive issue resolution.

The focus on personalized service is embedded in the strategy to improve customer experience across all channels, both physical and digital. This involves automating processes and developing hyperpersonalization capabilities. The commitment to operational excellence, which includes proactive issue resolution, is tied to the financial goal of achieving a CapEx to Sales ratio below 12.5% for 2025. The strategy aims to simplify the operating model to deliver these improvements efficiently. Finance: draft 13-week cash view by Friday.

Telefónica, S.A. (TEF) - Canvas Business Model: Customer Relationships

Telefónica, S.A. (TEF) structures its customer relationships to build trust and drive loyalty, a core component of its 'Transform & Grow' strategic plan unveiled in November 2025, which has 'Deliver the best in-class customer experience' as one of its six pillars.

For large Corporate/B2B clients, the relationship model shifts toward being a strategic partner, moving beyond simple sales to accompany clients on their digital transformation journey. This involves offering high added-value technological solutions like cybersecurity, cloud, and IoT, requiring salespeople who are highly trained in both technical knowledge and soft skills such as active listening and empathy. Telefónica Tech, which serves businesses, had over 7,000 professionals with more than 6,500 certifications as of the first half of 2025.

The company supports its customer base, which stood at 354 million accesses in Q1 2025, through a comprehensive multi-channel approach. This includes physical stores, the Internet, and mobile applications, all designed to ensure access and convenience. The strategy involves enhancing customer care across all channels, with significant investment in Artificial Intelligence to strengthen the digital experience.

Proactive communication and transparent service updates are embedded in the Customer Relationship Principles, updated in March 2025, which mandate maintaining clear, honest, and direct communication. This is implemented through 'Proactive solutions,' where Telefónica, S.A. (TEF) identifies potential issues before they impact customers, and by acting pre-emptively to ensure guaranteed quality.

The focus on improving customer experience is directly tied to loyalty metrics. The Net Promoter Score (NPS) for customers reached a record figure of 35 points in the first quarter of 2025. This follows a period in H1 2024 where the NPS was 2 percentage points higher than in the first quarter of that year. For internal alignment, the employee Net Promoter Score (eNPS) reached 75 points in 2024, exceeding the internal goal of 70.

Key relationship metrics and investment areas are summarized below:

Metric/Focus Area	Data Point	Period/Context
Customer Base (Total Accesses)	354 million	Q1 2025
Customer NPS	35 points	Q1 2025
Employee Upskilling/Reskilling Coverage	78%	2024
B2B Segment Revenue Growth	+5.4%	Q1 2025 Organic Growth
Investment in AI for CX Enhancement	Significant	Part of Transform & Grow Plan

The company strives for simplicity and agility in all interactions, aiming to eliminate barriers and offer intuitive solutions. This commitment to excellence in customer experience is considered hard to replicate and a key differentiator from competitors.

The multi-channel support structure is supported by the availability of various channels, including physical stores, the Internet, and mobile applications. For example, in Germany, Telefónica, S.A. (TEF) reconnected its digital sales flow through orchestration, leading to roughly one in five customers who abandoned a shopping cart completing their order within thirty days.

The overall strategic financial outlook for the core markets includes a targeted revenue Compound Annual Growth Rate (CAGR) of 1.5-2.5% between 2025 and 2028.

Telefónica, S.A. (TEF) - Canvas Business Model: Channels

You're looking at how Telefónica, S.A. gets its services-from connectivity to cloud-into the hands of its customers across Spain, Germany, the UK, and Brazil as of late 2025. The channel strategy is clearly segmented by brand and customer type, blending physical presence with digital reach.

The digital storefronts-Movistar.es, O2.com, and Vivo.com.br-are critical for the high-volume Residential (B2C) segment. While I don't have the specific unique visitor counts for late 2025, we can see the result of these channels in the revenue mix. For the second quarter of 2025, the B2C segment generated €5,323 million, which accounted for 61% of the Group's total revenue for that quarter. This segment saw organic revenue growth of 2.1% in Q2 2025.

For the Corporate and Public Administration segments, which fall under B2B and Telefónica Tech, the direct sales force and specialized digital integration teams are the primary interface. The B2B segment was a significant driver, bringing in €2,021 million in Q2 2025, representing 22% of the total revenue. Telefónica Tech, which focuses on digital solutions, reported revenues of €566 million in Q2 2025, marking a 12.5% year-on-year growth. Honestly, that double-digit growth in the Tech arm suggests the direct/specialized sales force is hitting its mark with enterprise clients.

Here's a quick look at how the main customer revenue streams broke down in Q2 2025, showing the relative weight of the channels serving those segments:

Customer Segment	Q2 2025 Revenue (Millions EUR)	% of Total Revenue	Organic Growth (Q2 2025)
B2C (Residential)	5,323	61%	+2.1%
B2B (Corporate/Public Admin)	2,021	22%	+5.2%
Wholesale	1,609	N/A	+1.6% (Service Revenue H1)

When you look at the physical footprint, the data is most concrete for the UK joint venture, Virgin Media O2. This entity maintains more than 430 retail stores to serve its customer base of 47 million UK connections. For the core European markets, the underlying network reach is what enables the channel effectiveness. For instance, as of the first half of 2025, 5G coverage stood at 94% in Spain and 98% in Germany. These high coverage figures definitely help the direct and third-party channels sell premium mobile services.

The overall reach, which underpins all channels, is substantial. Telefónica ended the first quarter of 2025 with 354 million accesses across its footprint. Furthermore, the fiber-to-the-home (FTTH) network reached 80 million premises by the end of Q1 2025, representing a 13% year-on-year increase. This fiber deployment is a key channel asset, especially for selling converged packages.

Regarding third-party distributors and telemarketing, while specific revenue attribution isn't broken out separately from the B2C/B2B buckets, the sheer scale of the 354 million accesses implies a heavy reliance on indirect channels, especially for prepaid and lower-tier mobile contracts in Latin America. The O2 brand in Europe, for example, emphasizes simplicity and fair pricing, which often aligns well with high-volume indirect sales models.

Finance: review the Q3 2025 channel efficiency metrics against the H1 11.1% CapEx/Sales ratio by end of the week.

Telefónica, S.A. (TEF) - Canvas Business Model: Customer Segments

You're looking at the customer base for Telefónica, S.A. (TEF) as of late 2025. The structure clearly divides the market into four main areas, each with distinct needs and revenue contributions.

Residential customers (individuals and households) in core markets

This segment, often branded as Movistar in Spain and Latin America or O2 in Germany and the UK, remains the largest by volume of connections, though revenue contribution is balanced by B2B growth.

As of September 2025, Telefónica, S.A. (TEF) had a total of 350.2 million connections, a slight decrease of 0.1 percent year-on-year. Contract customers across the group stood at 115.711 million as of the same date, reflecting a 3.2 percent decline. In the second quarter of 2025, B2C revenues reached €5,323 million, representing 61 percent of total Q2 revenue. For O2 Telefónica in Germany, the first quarter of 2025 saw the addition of 164,000 new mobile contract customers.

Key performance indicators for residential services in core markets during the first half of 2025 included:

• Spain organic sales increase in Q2 2025: 1.9 percent.
• Brazil organic sales increase in Q2 2025: 7.1 percent.
• Germany contract mobile net adds in Q2 2025: 12.1 percent.
• Pay TV subscribers as of September 2025: 8.715 million.

Corporate clients: SMEs, large companies, and multinationals (B2B)

The B2B segment, often channeled through Telefónica Empresas / Telefónica Tech, shows strong organic growth, particularly in digital services.

In the third quarter of 2025, B2B revenue was €2.020 billion, marking a 4.2 percent growth year-on-year. For the first half of 2025, B2B revenue grew organically by 5.2 percent. Telefónica Tech, the digital solutions integrator arm, reported revenues of €508 million in the first quarter of 2025, a 6.6 percent year-on-year growth. For the full first half of 2025, Telefónica Tech revenues reached €1,074 million, up 9.6 percent compared to 2024.

The focus within B2B is heavily on NextGen solutions, with key sectors driving this growth:

• IT already accounts for 46 percent of total B2B revenue.
• Public services, financial services, and healthcare together account for nearly 40 percent of Telefónica Tech's total sales in H1 2025.
• Growth in M2M connections for O2 Telefónica in Q1 2025 was 150,000 connections, a 132.4 percent increase.

Public Administrations and government entities

Public Administrations are grouped within the broader corporate segment, with specific traction noted in digital service integration.

The strong commercial momentum in the B2B segment, which includes public services, is a key driver for Telefónica Tech. The company provides digital services including cloud services, cybersecurity, IoT, AI, and professional integration services to this segment.

Wholesale partners and other telecommunication companies

This segment provides connectivity and network services to other operators.

Wholesale revenue in the third quarter of 2025 was €1.616 billion, showing an 8.0 percent rise compared to the previous year. In the second quarter of 2025, Wholesale & Partners revenue was €1,609 million, representing 17 percent of total revenue for that quarter. As of September 2025, wholesale customers totaled 28.826 million, a decrease of 5.2 percent.

Here is a summary of the latest quarterly revenue breakdown by segment:

Segment	Q3 2025 Revenue (EUR)	YoY Growth
B2C	5.321 billion	Declined 1.6 percent
B2B	2.020 billion	Grew 4.2 percent
Wholesale	1.616 billion	Rose 8.0 percent

The total reported revenue for Telefónica, S.A. (TEF) in Q3 2025 was €8.958 billion. The company confirmed its 2025 financial guidance, including a cash dividend of €0.30 per share, with the first tranche of €0.15 payable in December 2025.

Telefónica, S.A. (TEF) - Canvas Business Model: Cost Structure

You're mapping out the cost base for Telefónica, S.A. (TEF) as of late 2025, which is heavily influenced by its massive, owned network infrastructure and ongoing transformation efforts. The company has been disciplined with its spending, setting a clear benchmark for capital efficiency.

Telefónica, S.A. set a CapEx/Sales target to be less than 12.5% for the 2025 fiscal year. The company demonstrated progress toward this goal, reporting that Capital Expenditure (CapEx) for the first six months of 2025 reached €2,003 million, resulting in a CapEx to Sales ratio of 11.1% within that period. This investment focus is clearly on next-generation networks.

Here are some key financial metrics reflecting the cost environment as of mid-to-late 2025:

Metric	Period Ending	Amount
CapEx (H1 2025)	June 2025	€2,003 million
CapEx/Sales Ratio (H1 2025)	June 2025	11.1%
Operating Expenses (TTM)	September 30, 2025	$38.733B
Operating Expenses (Quarterly)	June 2025	EUR7.29B
Operating Expenses (Quarterly)	September 2025	EUR8.14B

The commitment to network deployment, specifically fiber and 5G, is a major driver of CapEx. The company is still investing heavily to maintain its network leadership position.

• Fiber network reached 82.6 million premises as of Q3 2025.
• 5G coverage in main markets stood at 78% as of Q3 2025.
• In Q1 2025, total Fiber-to-the-Home (FTTH) premises reached 80.0 million.

Personnel costs and restructuring are tied to the ongoing simplification strategy. A significant, non-recurring charge impacted the first half results, reflecting the cost of shedding non-core assets. The consolidated net loss for the first half of 2025 was €-1.29 billion, which included a €1.91 billion charge related to the sale of discontinued operations like Telefónica Argentina and Telefónica del Perú. Operational efficiencies are being sought through process simplification, which includes savings from lower maintenance costs and staff resigning enabled by technological upgrade.

Network operating costs are managed through efficiency drives, particularly around energy and maintenance. The company is realizing efficiencies derived from lower energy consumption and lower technical failures. While specific spectrum license fees for 2025 aren't itemized separately in the top-line operating expenses, the overall trend in operating expenses shows a year-over-year decline for the twelve months ending September 30, 2025, at 6.3%.

The structure of Telefónica, S.A. means it carries high fixed costs due to owned infrastructure, which is why the CapEx/Sales ratio is a key focus area for management to control capital intensity post-major build-out phases. The copper switch-off completion in Spain in 2025 is a step toward reducing some legacy operational costs, but dismantling remaining copper facilities continues. Finance: draft 13-week cash view by Friday.

Telefónica, S.A. (TEF) - Canvas Business Model: Revenue Streams

Telefónica, S.A. (TEF) reported total revenue of €18.013 billion from continuing operations for the first half of 2025. This figure reflects a reported decrease of 3.3% year-on-year, impacted by foreign exchange movements, but showed an organic increase of 1.5% for the first half of the year.

The core connectivity services, spanning both consumer (B2C) and business (B2B) segments, are the primary revenue drivers. For the first half of 2025, B2C revenue grew organically by 2.0% year-on-year, while B2B revenue demonstrated stronger momentum, growing organically by 5.1% year-on-year. You can see the most granular revenue split available from the second quarter of 2025 below, which illustrates the relative size of these streams.

Revenue Stream Component	Q2 2025 Revenue (Millions of Euros)	H1 2025 Organic Growth (Year-on-Year)
B2C Revenue	€5,323 million	2.0%
B2B Revenue	€2,021 million	5.1%
Wholesale & Partners and Others Revenue	€1,609 million	(Declined 4.7% in Q2 and H1)

Wholesale revenue from network access and roaming agreements, grouped with Partners and Others, showed a sequential improvement but still declined year-on-year. This segment accounted for 17% of total revenue in the second quarter, posting €1,609 million in the period, reflecting anticipated headwinds from the transformation of the partner business in Germany. Honestly, this segment is expected to be less predictable given the wholesale agreement renewals.

Digital services revenue, primarily channeled through Telefónica Tech, is a key growth area within the B2B segment. IT sales, which are a major component of Telefónica Tech, delivered double-digit growth and already accounted for 46% of the total B2B revenue in the first half. Also, revenue from the sale of hardware devices, such as handsets and equipment, contributed positively, with handset sales growing organically by 0.4% across the first half of 2025, though this is a smaller component compared to service revenues.

• B2C revenue represented approximately 61% of total reported revenue in Q2 2025.
• B2B revenue represented approximately 22% of total reported revenue in Q2 2025.
• The IT component within B2B is now 46% of total B2B revenue.
• Handset sales growth for H1 2025 was +0.4%.

Finance: draft 13-week cash view by Friday.