Marc Murtra, the chairman of defence company Indra, is set to take the helm at Telefonica, the Spanish telecom behemoth, following the board’s decision. The move comes after the state-owned fund SEPI recommended the change in leadership, replacing current CEO Jose Maria Alvarez-Pallete.
The telecom giant’s board convened a special meeting on Saturday, deciding to terminate Alvarez-Pallete’s contract and proffer the position to Murtra, who accepted the job. However, this decision awaits shareholder approval, Telefonica confirmed.
SEPI had earlier proposed the shift in leadership, suggesting Murtra as a replacement for Alvarez-Pallete who has been at the helm since 2016. The source of this information preferred to remain anonymous but confirmed the news to Reuters.
Alvarez-Pallete’s tenure was due for renewal this year during the annual general shareholders meeting usually slated for April or May. Murtra, during his time at Indra, a company where the Spanish government holds a 28% stake, directed efforts towards the defence and aerospace sectors, capitalising on the increased military budgets in European countries due to escalating global tensions.
Back in May 2024, the Spanish government procured a 10% stake, worth approximately €2.3 billion ($2.36 billion), in Telefonica through SEPI. The move was a countermeasure to Saudi Arabia’s STC acquiring a similar stake in late 2023. This purchase awarded the government a seat on Telefonica’s board as well.
Telefonica, being a defence service provider and thus a strategic company, saw the transaction approved by the government in November 2024, once they had secured a similar stake in the telecom business as STC.
In recent years, Telefonica, akin to its European counterparts, has grappled with profitability pressures due to intense competition and the imperative of heavy investment in 5G infrastructure. To finance 5G and optic fibre, the company has been divesting stakes in more mature businesses like submarine cables or mobile masts and smaller operations in Latin America.
($1 = 0.9736 euros)
The headline of the story has been updated.
