The company was created in Madrid in 1924 as Compañía Telefónica Nacional de España (CTNE) with ITT as one of its major shareholders.

[9] In December 2023, the Spanish government announced plans to acquire a stake of up to 10% in Telefónica worth $2.2 billion through the state holding company SEPI.

Because Telefónica is considered a defense service provider and a strategic company, the Spanish government has a say in acquisitions and holdings between 5% and 10%.

[9] The major stockholders include:[11] In May 2022, Telefonica announced the acquisition of the European cloud-based services specialist and cloud Microsoft Dynamics partner BE-terna.

[18] According to the merger announcement, O2, which provided mobile phone services in the UK, Ireland, Germany and the Isle of Man (uniquely to the O2 group Manx Telecom also offered fixed-line services), retained its name and continued to be based in the United Kingdom, keeping both the brand and the management team.

In January 2015, Li Ka-shing entered into talks with Telefónica to buy O2 for around £10.25 billion, aiming to merge it with his subsidiary Three.

[19] The acquisition was officially blocked by the European Commission on 11 May 2016, which argued that the merger would reduce consumer choice and lead to a higher cost of services[20] Telefónica began to seek a stock market flotation of the business instead.

Telefónica plans to divest the majority of its Latin American business in order to focus on the core markets UK, Spain, Germany and Brazil and add €2 billion in revenue with this programme.

It provides broadband, local and long-distance telephone services in southern part of the country as well as the Greater Buenos Aires area.

In July 1998, acquired Telesp, the telephony operator of the Telebrás system in the state of São Paulo, forming Telefônica Brasil.

On 26 October 2009, Telefónica Chile changed its name to Movistar, including cellphone, landline, satellite TV, and internet.

[28] On 18 April 2006, Telefónica's president Cesar Alierta signed an agreement with the Colombian government to buy 50% and one share of the state-owned communications company, Colombia Telecomunicaciones (TELECOM).

[29] With this sale, Telefónica became the largest Colombian land-line operator, and also gained an important presence in the local, long-distance and broadband market.

It is unknown what will happen with their previous established subsidiary Telefónica Empresas, being most probable a merger with TELECOM.

Based in Miami, Florida, Telefónica USA, Inc. provides services to U.S.-based multinational companies that have operations in Latin America and Europe.

Telefónica USA also operates the KeyCenter, a data center in Miami built to withstand category 5 hurricanes,[31] from where the company supports Business Continuity and IT services for Enterprise customers in South Florida.

[33] In 2018, China Unicom and Telefónica establish a new partnership to combine their services and networks in the internet of things, so as to enable their clients to deploy IoT products and services in China, Europe and Latin America with a single global IoT SIM card.

As part of this deal Telefónica also gained its 100% subsidiary Eurotel, one of three mobile phone operators in the Czech Republic.

Starting 1 July 2006, both companies were merged into one legal entity and renamed Telefónica O2 Czech Republic.

It was announced on 24 June 2013 that Telefónica had agreed to sell its O2 Ireland mobile business for at least €780 million ($1 billion) in cash to Hutchison Whampoa's subsidiary 3.

In late 2003, Telefónica announced its intention to acquire the entirety of Telco by January 2014, potentially becoming Telecom Italia's largest shareholder.

The plan, was however challenged by the Brazilian competition authority since Telefónica and Telecom Italia, with Vivo and TIM Brasil respectively, are the two largest telephone companies competing in Brazil.

However, the transaction for the El Salvadoran operations to be sold to América Móvil were scrapped due to regulatory hurdles.

In football, Teléfonica is an official sponsor for several national teams such as Spain (Movistar+) in Europe, and Brazil (vivo), Mexico, Colombia, Peru, or Venezuela in the Americas.

In the 2000 CART season, PPI Motorsports raced the #96 Telefónica Toyota-Reynard, driven by Spanish rookie Oriol Servià.

[48] Telefónica is a supporter of the Hybrid Broadcast Broadband TV (HbbTV) initiative that is promoting and establishing an open European standard for hybrid set-top boxes for the reception of broadcast TV and broadband multimedia applications with a single user interface, and has run pilot HbbTV services in Spain.

[49] Telefónica's Wayra subsidiary first launched in Latin America and Spain in 2011 to provide seed investment and mentoring to new companies.

[56][57] On January 29, 2025 Telefonica had hired investment bank JPMorgan to evaluate a possible sale of the Argentina business.

In February 2010, Telefónica CEO Cesar Alierta expressed in a meeting at Bilbao, Spain that his company intends to charge Google and other search engines for the use of their network.

Alierta[67] complained that such search engines were benefiting from the platform without contributing to the company's expenses and that such a trend will change in the near future.