Telefónica selects Boston Consulting Group as partner for new strategic plan

Spanish telecom giant Telefónica has brought Boston Consulting Group on board to support the development of its new strategic plan.

The hire of Boston Consulting Group comes shortly after Telefónica installed a new Chairman, Marc Murtra, who has opted to hire Boston Consulting Group as the board’s strategic advisor.

The company’s previous strategic plan [2023-2025] was designed with support from McKinsey & Company. That plan had three key pillars – growth, profitability, sustainability – and targeted annual revenue growth of around 1%, an EBITDA increase of 2%, and free cash flow above 10% by 2026.

In 2024, Telefónica generated robust performance, with revenues of €41.3 billion, up 1.6% from the previous year. Its adjusted net profit amounted to €2.3 billion. That led the group to state that it achieved “all its financial objectives” for 2024.

The telecom giant however is facing a number of pressing challenges, such as increased competition in its home market Spain (notably due to the merger between Orange and MasMovil), the need to make major investments in assets and infrastructure, and pressures in Telefónica’s international markets (mainly Latin America).

Murtra meanwhile said in an interview with the Financial Times that Europe’s telecom sector is on the verge of major change, driven by cross-border consolidation and the desire for more Europe’s IT sovereignty. “We think there’s got to be – and there is going to be – an intra market consolidation and a European wide consolidation. That is what we want to play a leading part in.”

Five key strategic principles

In the company’s shareholders’ meeting earlier this month, Murtra told shareholders that Boston Consulting Group will support a “major and ambitious strategic review” that will centre on five key principles: changes in Europe; putting customers at the centre of everything; technology and operational excellence; disciplined industrial logic; and the creation of value for customers, employees and shareholders.

With those principles in mind, Telefónica has three key priorities, noted Murtra. The first is a regional focus on Europe, the second priority is to maintain sound financial discipline and to simplify the company, while the third is about achieving operational and technological excellence.

In 2022, Telefónica approached Boston Consulting Group to help it turnaround its pay-TV platform Movistar+, which had lost 300,000 customers the previous year. Before that, the Spanish group worked with Kearney and McKinsey on two major reorganisation programs.