Topic: How To Invest

Pat: I would appreciate your analysis of Telefonica SA of Spain. Best regards.

Article Excerpt

Telefonica SA (ADR), $57.37, symbol TEF on New York (ADRs outstanding: 1.5 billion; Market cap: $87.2 billion), provides a range of telecommunications services, including traditional telephone, wireless, Internet access and entertainment. Telefonica mainly operates in Spain, Portugal and a number of Latin American countries. The company has 42 million traditional telephone customers, 206.7 million wireless subscribers, 17.9 million Internet users and 2.6 million pay-TV subscribers. Telefonica gets about 35% of its revenue from Spain, but it has been expanding its services in Latin America (which now accounts for 41% of its revenue) and the rest of Europe (24% of revenue). The company’s Latin American expansion has helped offset weakness in Spain and Europe. The weaker euro is enhancing the contribution of its Latin American operations. Telefonica is also making inroads in China: the company continues to expand its alliance with China Unicom, the country’s second-largest wireless carrier. In October 2009, each company bought $1 billion of the other’s stock. That boosted Telefonica’s stake…