State-owned investment fund SEPI has proposed replacing Telefonica’s long-serving Chief Executive, Jose Maria Alvarez-Pallete, according to sources familiar with the matter. Alvarez-Pallete, who has led the telecommunications giant since 2016, was up for a contract renewal this year.
The frontrunner to succeed him is Marc Murtra, currently the executive chairman of defense company Indra. Murtra, who has a strong relationship with SEPI — the largest shareholder in Indra — is seen as a strategic choice to steer Telefonica amid a rapidly evolving telecommunications landscape.
The decision was finalized in an board meeting, with the approval of shareholders through a general assembly still required. The leadership change was first reported by El Confidencial.
Indra, under Murtra’s leadership, has increasingly focused on its defense and aerospace sectors, capitalizing on rising military budgets across Europe in the wake of growing geopolitical tensions. The Spanish government, which holds a 28% stake in Indra, has been closely involved in the company’s strategic direction.
Telefonica, meanwhile, has faced mounting challenges, including fierce competition in Europe and the heavy capital investment needed to expand its 5G infrastructure. The company has responded by divesting assets in more mature sectors such as submarine cables, mobile masts, and smaller operations in Latin America to fund its investments in next-generation technologies.
SEPI’s influence in Telefonica increased in May 2024 when it acquired a 10% stake in the company, valued at approximately €2.36 billion ($2.36 billion), in response to a similar acquisition by Saudi Arabia’s STC late in 2023. Following the government’s purchase, it secured a board seat, with Carlos Ocana, a former cabinet chief from the Ministry of Industry, proposed as the government’s representative.
Related topic:
Canada Readies C$150 Billion Trade Countermeasures
Judge Rejects Novartis’ Attempt to Halt Generic Launch of Entresto
