Jose Maria Alvarez-Pallete, CEO of Telefonica, during a keynote at Mobile World Congress 2024 in Barcelona, Spain, on Feb. 26, 2024.
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A group of shareholders of Spanish telecom company Telefonica led by state-owned investment fund SEPI have called for a board meeting to replace Chief Executive Jose Maria Alvarez-Pallete, El Confidencial news website reported on Saturday, citing unnamed sources close to the talks.
The leading candidate to replace Alvarez-Pallete is Marc Murtra, currently executive chairman of defence company Indra, whose largest shareholder is SEPI, El Confidencial added.
Telefonica declined to comment, a SEPI spokesperson did not immediately respond to a Reuters request for comment and no one at Indra was immediately available for comment.
The current term of Alvarez-Pallete, who is leading the company since 2016, was due for renewal this year at the annual general shareholders assembly.
The Spanish government bought a 10% stake worth about 2.3 billion euros ($2.36 billion) in Telefonica through SEPI in May 2024 to counterbalance the acquisition of a similar stake by Saudi Arabia’s STC in late 2023.
On May 8, after having reached a 7% stake in the company, the government requested a seat on Telefonica’s board and proposed Carlos Ocana, a former industry ministry cabinet chief, to represent the government’s interests.
Over the past years, Telefonica, like rivals in Europe, has faced a squeeze on profitability from fierce competition and the need for hefty investment in infrastructure for the 5G next-generation mobile technology.
It has been selling stakes in more mature businesses such as submarine cables or mobile masts and smaller operations in Latin America to fund 5G and optic fibre.