Telefónica Continues Hispanoamerica Exit with Divestment Talks in Mexico, Ecuador Sale

Spanish telecom giant Telefónica is pressing forward with its strategic retreat from Spanish-speaking Latin America, entering exclusive negotiations to sell its Mexican business to Beyond ONE, the owner of Virgin Mobile Mexico. According to sources cited by Reuters, the potential deal could be valued at approximately EUR 520 mn (USD 610mn). This follows a series of high-profile divestments in the region, reinforcing Telefónica’s broader plan to streamline operations, reduce debt, and focus on core markets: Spain, Brazil, Germany, and the UK.

The Mexico deal would mark another significant step in Telefónica’s regional exit strategy, which began in 2019 and has accelerated under new CEO Marc Murtra, appointed in early 2025. Murtra is steering the company away from volatile and less profitable markets in favor of those offering greater stability and higher capital returns. Telefónica is now concentrating resources on next-generation technology investments – particularly 5G and fiber optics – in its core geographies.

The company’s rationale for withdrawing from Spanish-speaking Latin America lies in persistent challenges: currency instability, regulatory uncertainty, sluggish capital markets, and intense competition that has undermined profitability. 

Just weeks before the Mexico talks surfaced, Telefónica announced the USD 380mn sale of its Ecuadorian subsidiary to Luxembourg-based Millicom, a leading telecommunications provider in the region. Millicom has emerged as a recurring buyer in Telefónica’s Latin American asset sales, having previously agreed to acquire its Uruguayan and Colombian operations. In Colombia, Millicom took control of 67.5% of Coltel (Movistar Colombia), while in Uruguay, it will absorb Telefónica’s full operations.

Other notable transactions include the sale of Telefónica’s Peruvian unit to Integra Tec International and the transfer of its Argentine business to Telecom Argentina, though the latter is still under regulatory scrutiny due to competition concerns.

These moves form part of Telefónica’s calculated effort to exit markets with diminishing returns and reinvest in regions that align with its long-term strategic objectives. As Telefónica pulls back, companies like Millicom are stepping in – potentially signaling a shift in regional telecom dynamics, where established players may now consolidate power in markets the Spanish giant is leaving behind.

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