Telef\u00f3nica’s investment in the first half of 2026 amounted to 1,908 million euros, a 1.4% increase compared to the same period of the previous year. In the second quarter, capex stood at 1,042 million, a 3.9% increase at a real exchange rate. The investment-to-revenue ratio for the semester was 11.6%, within the target of around 12% set for the entire year.<\/p>\n
This data refutes a common interpretation of European operators in a consolidation phase. Telef\u00f3nica is not reducing its investment: it is moderately increasing it while keeping the investment-to-revenue ratio within the committed range. This is a different \u2014and more demanding\u2014 position than cutting capex to sustain cash flow.<\/p>\n
It is advisable, however, to examine the evolution with quarterly details. In the first quarter, investment was 866 million euros, with an investment-to-revenue ratio of 10.7%. In the second, the 1,042 million on revenues of 8,265 million place the quarterly ratio above the 12% threshold. In other words: the ample margin the company shows in the accumulated half-year primarily comes from the beginning of the fiscal year, and the second quarter has already consumed part of that cushion.<\/p>\n
The operational return on that investment is visible. The Group has increased its access base to 299.8 million, up 5.3%, has increased fiber-to-the-home accesses by 8.3% to 14.2 million, and has expanded its FTTH footprint to 76.6 million passed real estate units, 1.7 million more than in March. 5G coverage reaches 83% of the population in its four core markets, two points more than in the previous quarter, with 99% in Germany, 96% in Spain, 88% in the United Kingdom, and 72% in Brazil.<\/p>\n
The bulk of fiber deployment is completed in the main markets, and the current work consists of densifying the existing footprint, migrating customers from legacy technologies, and completing mobile coverage. These activities consume less capital per unit of output than building a network from scratch, which explains why a moderate increase in capex coexists with a contained investment-to-revenue ratio.<\/p>\n
The financial implications are direct. A predictable investment is the component that allows converting EBITDA growth into cash flow growth, which is the core of the company’s narrative this quarter: adjusted EBITDA advanced 6.4% in real terms and adjusted operating cash flow 6.7%. That the cash metric grows more than the earnings metric is the accounting signature of an investment under control.<\/p>\n
This mechanism also supports the two most sensitive commitments of the year. The first, the reduction of leverage: net financial debt closed June at 25,278 million euros, 8.4% less year-on-year, with the ratio at 2.68 times compared to 2.72 in March and on track for the target of 2.5 times EBITDA set for 2028. The second, the dividend of 0.15 euros per share confirmed for 2026.<\/p>\n
The question the market will follow closely is whether the 11.6% ratio will be sustained in the second half of the year. The usual seasonality of the sector concentrates a relevant part of investment execution in the last quarter, so the annual closing ratio will predictably be higher than that of the semester. The rebound already observed between the first and second quarters points in that direction, although the accumulated starting point leaves the company in a position to meet the objective without cutting deployment.<\/p>\n
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