The strategy laid out by Telefónica’s president, Marc Murtra, aligns with a shift in Brussels: at the heart of Europe, technological sovereignty is today, more than ever, a question of power. Just five years ago, the future of European telecommunications seemed limited to a secondary role, consisting of transporting digital traffic and investing billions in networks while economic value concentrated in the major American platforms. Google, Microsoft, Amazon, and Meta gained influence, while European operators faced tougher regulation and diminishing profitability.
Artificial intelligence (AI), cloud computing, cybersecurity, satellites, hybrid warfare, and the deterioration of the geopolitical environment have changed that perception. Although networks remain a business and will continue to be so, they are also recognized as critical infrastructures. After the recent shocks, Europe already understands the political cost of depending on Russian gas and the strategic value of domestic semiconductor production. And now, connectivity is beginning to enter the same category: a condition to preserve room for economic and political decision-making.
“The objective is for Europe to maintain decision-making capacity over the technologies and infrastructures that condition its security, its economy and its political autonomy”
However, that condition does not imply abandoning globalization nor aiming to manufacture every component within the European Union. Ignacio Torreblanca, senior researcher at the European Council on Foreign Relations (ECFR), sums up tech sovereignty in Agenda Pública as the ability to “control the process, not necessarily that everything be exclusively European.” Following this idea, the goal is for Europe to retain the ability to decide on the technologies and infrastructures that condition its security, its economy, and its political autonomy. Under that criterion, telecommunications are a particularly sensitive part of European industrial policy.
And in Spain, the spearhead is Telefónica. The company has published the results for the first half of 2026, reporting €16.392 billion in revenue, an adjusted EBITDA of €5.768 billion, an 8.4% year-on-year decrease in net financial debt to €25.278 billion, and confirmation or improvement of its financial targets for the full year. These figures are a proof that the company possesses enough stability to aspire to become one of the pillars of Europe’s digital economy.
Brussels has also changed
The same Torreblanca argues that the European debate must accept that twenty-seven national tech sovereignties are unfeasible. If member states share dependencies on the United States and China, attempting to solve them separately adds fragmentation. Therefore, he notes that the response should be articulated at the European level: a market capable of generating companies large enough to compete globally, rather than twenty-seven national champions.
“The response must be articulated at a European scale: a market capable of generating companies large enough to compete globally, rather than twenty-seven national champions”
And, from Spain, Murtra insists on consolidating the sector and strengthening technological capabilities, issues that lie at the heart of the debate as they raise questions about how Europe can regain industrial capacity in a more competitive international environment.
Brussels has focused, for much of the recent period, its digital policy on regulation. The General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), and the Digital Services Act (DSA) established the European Union as a normative power capable of projecting its standards beyond its borders.
Moreover, the reports prepared by Mario Draghi and Enrico Letta have reinforced another priority: Europe needs to produce technology, fund innovation, and create companies capable of competing in global markets. Strategic autonomy has expanded beyond defense and energy to include AI, cloud computing, quantum computing, data centers, and telecommunications networks. This shift brings back prominence to a sector that had lost it over the last decade.
Industrial AI, connected vehicles, factory automation, and digital health will operate over fiber networks and 5G and, later, 6G. The debate thus is not only about who develops the applications: it also concerns the control of the infrastructure that enables their use.
Public opinion is moving
Within this change, the political dimension must not be neglected. The COVID-19 pandemic exposed dependence on foreign suppliers for essential products and, subsequently, the war in Ukraine transferred that vulnerability to energy. Later, the rising tension in the US-China technology rivalry, along with trade pressures, has extended this to digital capabilities.
“Digital sovereignty, as a concept, is now closer to the average citizen, who also frequently links it to other concepts such as security and competitiveness”
This accumulation has exposed the economic and political costs of depending heavily on foreign providers in critical areas, but it is already driving change. Today, there is a broad Spanish majority in favor of European technology, marking an important shift in perception. Digital sovereignty, as a concept, is now closer to the average citizen, who also often ties it to security and competitiveness.
The limit is in Brussels
The main question lies beyond the telecommunication sector’s control: the European framework. Building large tech companies in a market divided among dozens of national operators, multiple regulators, and consolidation procedures more restrictive than those in the United States or China is challenging.
Telefónica and the rest of the sector have been calling for years for a revision of the rules that would ease mergers, increase the scale of companies, and allow higher investment in new technologies. But the European response remains ambivalent.
“Brussels demands greater technological autonomy while maintaining a market structure that makes it hard for European operators like Telefónica to reach a size capable of competing”
The Commission acknowledges the need to strengthen competitiveness, but maintains a competition policy designed for a different environment. Thus, the dispute centers on how to protect consumers and competition without blocking the emergence of European companies capable of challenging global markets. Brussels advocates for more technological autonomy while preserving a market structure that hinders the appearance of European operators like Telefónica with sufficient size to compete with the giants from the United States and China.
Teresa Ribera, Executive Vice-President of the European Commission for a Clean, Fair, and Competitive Transition, recently framed this issue in Agenda Pública: “The construction of European champions able to compete in global markets faces a difficulty that does not necessarily arise from the will to guarantee competition, competitiveness, and innovation. It is much more tied to the challenge of operating at the European level due to fragmentation among twenty-seven national markets, which still has not been overcome by building the internal market.”
Ribera added: “There are sectors particularly important in this area. We lack a single telecommunications market, a single energy market, a single capital market and financial services. This fragmentation creates higher costs for operating companies, but also for consumers who seek alternatives in other markets, whether to grow as companies or to avoid being resigned to what their domestic market offers.”
Telefónica facing the European shift
Quarterly results are only a snapshot of part of the change. The most significant transformation lies in the position Telefónica is trying to secure as a company tied to Europe’s economic security, competitiveness, and technological sovereignty.
Nothing guarantees that Murtra’s strategy will succeed. Competitive pressure remains intense, investment needs will rise, and the consolidation of the European market is far from guaranteed. The Spanish company, however, is one of the sector’s key wild cards to take that step and become a strategic company for the continent.
“Management direction and geopolitical analysis agree that competitiveness and sovereignty have once again become linked”
The European Union, which had grown accustomed to acting as a global regulator, is the same body that now wants to produce, innovate, and preserve its own capacities. Management direction and geopolitical analysis agree that competitiveness and sovereignty have again become linked. Now it is up to the diagnosis to translate into a less fragmented market and into concrete industrial decisions.
