Spanish telecom operator Telefónica plans to expand through acquisitions in key European markets and Brazil, while simultaneously selling units in Latin America. The company’s new head, Marc Murtra, is preparing a strategy aimed at consolidating a sector that, in his view, is too fragmented and risks falling behind in the development of technologies, including artificial intelligence and cybersecurity.

Telefónica has already agreed to sell its assets in Argentina and Uruguay and is considering exiting Chile, Mexico, and Ecuador. According to analysts, these moves could free up to 3.6 billion euros for mergers and acquisitions. Potential targets include Vodafone Spain, German operator 1&1, assets in Brazil, and Liberty’s stake in the Virgin Media O2 joint venture.

Telefónica’s shares have risen since the beginning of the year, but the company’s market capitalization remains half of its 2015 level, and its stock is among the most shorted in Europe. Analysts note that consolidation could strengthen the industry, while the current geopolitical situation increases the chances of European regulators easing their stance on operator consolidation.