Telefonica boss César Alierta talked to Pope Francis on departure

In the days before announcing his departure as chairman and chief executive of Telefonica, César Alierta boarded a private plane for Rome to confer with the Pope about his plan, according to people with knowledge of the matter.

Mr Alierta, 70, spoke more than once with Pope Francis as he weighed a change after almost 16 years atop Spain’s former telephone monopoly.

While Telefonica chief operating officer José María Álvarez-Pallete has been heir apparent for more than three years, the decision to leave now came together in the last two to three weeks, the sources said.

The death of Mr Alierta’s wife last year also left him dedicating less time to the company, they said. Telefonica was until recently the owner of O2 here.

Mr Alierta, who hails from a family of politicians, built his career on having the right connections, and used Spain’s political environment to advance his company’s interest.

His sense of timing was evident when he announced his successor, just as Spain muddles through a political stalemate that’s left country without a government — a consideration that factored into the decision’s timing, and gives Telefonica’s incoming CEO a chance to operate freer from political influence than at any time in the company’s 90-year history.

“Alierta was associated with a certain generation of business leaders,” said Ricardo Wehrhahn, managing partner at Intral Strategy Execution, a banking and business consulting firm in Madrid. “They were business people with political backgrounds and connections and that was very important. The new generation is more technical.”

Mr Alierta will remain involved as a board member and as head of the Telefonica Foundation, the company’s social responsibility platform, sources said.

They became friends when Pope Francis was in Buenos Aires. Together they have discussed boosting digital access for children and helping young entrepreneurs, and are looking for ways to collaborate on child welfare and education projects in Latin America.

If, as expected, Mr Pallete is named as Mr Alierta’s replacement, he will be the first Telefonica chairman who was not appointed by the government. A technocrat who scrupulously avoided politics during his rise through the ranks, Mr Pallete was chosen because he had the clearest strategy and was best-suited to navigate the carrier through a technology-driven environment.

Near the top of the do-list is lowering debt. A planned initial public offering of the company’s Telxius infrastructure unit and EU approval of the sale of UK wireless unit O2 would help, but there is more to do in a company with €49.9bn in net debt.


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