Transformation
Álvarez-Pallete explained the reasons behind the decision undertake one of the biggest and deepest transformations of the industry and its subsequent evolution towards a platform company, "turning the data into the enabler of a new Telefónica and repositioning us in a space of innovation where many were not expecting us". The chairman of Telefónica has detailed the investment of nearly 50,000 million euros made since 2012 in the different platforms. He’s also explained how this effort has placed Telefónica in a leading position on issues as relevant as the deployment of ultra-band networks (up to 40 million of real estate units and LTE coverage of more than 60% of the population) or in the pioneering initiative of providing Artificial Intelligence and Cognitive Systems to the company's networks and services. This will allow the customer to manage their digital experiences with Telefónica in real time.
In this sense, José María Álvarez-Pallete has illustrated this business transformation by saying that Telefónica has gone from selling minutes to selling gigabytes, and that broadband revenues and connectivity services have surpassed access and voice for the first time. In his speech to the shareholders, he highlighted the growth of the main financial figures, a good performance that has translated into net profit and generated a free cash flow that grows for the first time in five years, up to 24%. Together with a record investment of up to 16.5% of revenues.
Precisely in relation to the goals set for 2017, Telefónica's chairman has reiterated to the company's shareholders that it will be a year of sustainable growth thanks to a solid and already consolidated base and with very clear priorities: to grow cash generation, with expansion of margins and maintaining high levels of investment. He also recalled the success of the partial sale of Telxius  last February, as well as the objective of maintaining a solid investment grade rating, reinforcing the company's balance sheet through the aforementioned cash generation and a progressive organic deleveraging.
The AGM has also approved several proposals with respect to the Board of Directors. Shareholders voted the re-election of José María Álvarez-Pallete and Ignacio Moreno as directors, and the ratification and appointment of Francisco José Riberas Mera and Carmen García de Andrés as new members of the Board of Directors of Telefónica, in such a way that independent directors represent now 53% of the total number. They have also approved a reduction in the number of members of the Board of Directors to 17, in line with good governance recommendations and international trends.
The other proposed resolutions have also been approved by shareholders, including the delegation to the Board of Directors of the power to issue debentures, bonds or notes among others, and to formalize, interpret, remedy and carry out the resolutions adopted by the shareholders at the AGM held today. They also approved the consultive vote on the 2016 Annual Report on Directors' Remuneration.
Sustainable model
Lastly, José María Álvarez-Pallete explained in his speech that the goals reached by Telefónica have been achieved from a sustainable business model base, generating impact in all markets in which the company operates. In this sense, 2017 Shareholders' Meeting is been certified as a Sustainable AGM by Aenor in accordance with ISO 20121: 2012.
The president of Telefonica has said that "for us, it is as important to achieve our goals as how to achieve them" and stressed that "we want to contribute to create a better, more equitable world, actively participating in the construction of the new Digital Society". He has also highlighted the importance of working in reducing the digital gap, with digital education being a very effective way to achieve it. Therefore, Fundación Telefónica, Telefónica Digital Education  and Fundación Profuturo are also promoting programs to improve the skills and competencies of children and young people.
From a regulatory perspective, Álvarez-Pallete has also focused on the ethical debates that technology poses and has criticized the need to achieve "digital trust" and guarantee a safe and reliable Internet experience, a fundamental requirement for development of the digital economy. "At Telefónica we have clear principles of privacy regarding the use of data: security, transparency and control. Our priority is to cultivate the trust of our customers every day, "said Telefónica's executive chairman.