The Telefónica Czech Republic Group is comprised of Telefónica Czech Republic and several other subsidiaries. In 2011, the group’s services were provided mostly to the territory of the Czech Republic and in Slovakia. The group has been operating in Slovakia since 2007 through a wholly-owned subsidiary, Telefónica Slovakia.

Telefónica Czech Republic is now operating almost seven million lines, both fixed and mobile, making it one of the world’s leading providers of fully converged services. It offers a comprehensive range of both fixed and mobile voice, data and internet services in the Czech Republic. In September 2006 it also started offering a digital television service (O2 TV), and in 2007 it significantly expanded its IT and ICT operations (comprehensive business communications solutions). It also offers its network infrastructure for lease by other operators of public and private networks and services.

The retail business in the Czech Republic is focused on two main customer segments – business and consumers. The business segment includes medium business and corporate customers and public and government institutions. Telefónica Czech Republic also provides services on a wholesale basis to other public telecommunications network providers, and to providers of public telecommunications services both in the Czech Republic and abroad.

Part of a bigger picture
Telefónica Group is one of the world’s leading integrated operators in the telecommunications sector, providing communication, information, and entertainment solutions, with a presence in Europe, Africa and Latin America. The group is operational in 25 countries. As of December 2010, Telefónica’s served a total of 288 million customers. Telefónica’s growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America.

In terms of market capitalisation, the group is the fourth-largest telecoms operator in the world; first among European integrated operators, and third in the Eurostoxx 50 rankings, which is composed of Europe’s blue chip companies. Telefónica is a 100 percent private company with more than 1.5 million direct shareholders. Its stock trades on the continuous market on the Spanish Stock Exchange, as well as those in London, Tokyo, New York, Lima, Buenos Aires and São Paulo.

Telefónica has one of the most international profiles in the sector, with close to 70 percent of its business coming from outside its home market. The group has a strong reference point in the Spanish and Portuguese-speaking markets: in Latin America, Telefónica served more than 183 million customers as of the end of 2010, making it the leading operator in Brazil, Argentina, Chile and Peru. The group also has substantial operations in Colombia, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Puerto Rico, Uruguay and Venezuela. In Europe, the group owns operating companies in Spain, the UK, Ireland, Germany, Czech Republic and Slovakia, providing services to 104 million customers as of the end of 2010.

Telefónica’s technology
Telefónica Czech Republic, pursuing the strategy to retain its leadership in the mobile internet market, significantly expanded the coverage of its high-speed mobile networks (EDGE and 3G). It also successfully boosted its transmission speeds, without compromising on the quality of service. The company covered 72 towns and their surrounding areas with signal and improved coverage for 10 other towns.

At the end of 2011, 1,699 towns and villages, which represent 73 percent of the population, were covered with the service. The average downlink speed reached 1.5 MB/s in locations where the new network had been built; the average speed reached levels as high as 4.5 MB/s. The technology coverage was up 81 percentage points and reached 98 percent of the population, which brought it to the level of the other two operators.

The expansion of the mobile broadband network went hand-in-hand with a new portfolio of mobile internet tariffs for both pre-paid and contract customers. This, in turn, was reflected by a higher level of customer satisfaction across all segments. All the above has led to a 1.3 percentage point increase on the scale of the Customer Satisfaction Index, which has helped the company close the gap on its competitors.

Shared responsibility
In terms of organisation, Telefónica Czech Republic is a part of Telefónica’s European division (Telefónica Europe), which holds all companies that use the O2 commercial brand regardless of ownership relations within Telefónica Group. No significant changes have occurred in the ownership structure of the company; Telefónica, holding a 69.41 percent stake, remains the majority owner.

Telefónica Czech Republic’s ownership rights in its subsidiary companies – except for those incorporated in foreign jurisdictions – are exercised by its board of directors in the capacity of sole member. Persons with power of attorney given by the board of directors of the parent company exercise the ownership rights in foreign subsidiaries within the limits of the mandate approved by the company’s board of directors.

Personnel changes in the subsidiary companies’ statutory and supervisory bodies and in companies where Telefónica Czech Republic holds an ownership interest (in positions occupied by the company’s representatives) are approved by the board of directors of the company and, in accordance with the Articles of Association, they are also subject to prior approval by the supervisory board of the company, whose decisions are made in consideration of the opinion given by the nomination and remuneration committee.