Telefónica chief sees firms such as Google being regulated like telecoms operators

Telecoms giant confirms interest in selling Digital Plus stake

Telefónica Chairman César Alierta said Thursday that he expects that so-called over-the-top (OTT) providers of internet content such as Google, Facebook and Whatsapp will be regulated in a similar way to telecoms operators.

César said that when current rules governing the operations of telecoms companies were established, content transmission via the internet was in its infancy. He went on to say that the time had come to impose a regulatory framework on OTT operators.

Addressing a news conference to explain the company announcement of a major overhaul of its top management structure, Alierta said he expects the imbalance in regulatory treatment of telecoms and OTT operators to be rectified “shortly” in Europe and Latin America.

He noted that while traditional telecoms operators had invested 60 billion euros in 2013, providing jobs for 1.5 million people and paying “lots of taxes,” OTT operators invested 30 million euros, had a combined workforce of 20,000 and barely pay any tax.

Alierta said that telecoms operators are the true vehicle of digitalization because “they connect people.” “If they say that they are going to digitalize Europe with 30 million euros, great! Because Telefónica would sign up for that,” he added.

Without directly mentioning Facebook, and its founder Mark Zuckerberg’s new project, which will aim to connect five billion people worldwide who do not have access to internet, Alierta said: “It’s great that they say they are going to connect the Third World. But who’s going to set up the connections? Because if they have to set up connections in Zambia and Uganda, the operator there will install them.”

Telefónica’s restructuring will mean the disappearance of regional headquarters in São Paulo and London, with all divisions globally reporting to Madrid. Asked if Telefónica felt like a Spanish company again as a result of the makeover, Alierta said it was a Latin American and European company.

Speaking at the same news conference, chief executive officer José María Álvarez-Pallete confirmed Telefónica is interested in selling most of its 22-percent stake in the television company Digital+. PRISA, the owner of EL PAÍS, has a 56-percent stake in Digital+.