The firm yesterday lagged behind projections with its first quarter results yesterday, which were weighed down by a weak performance in its native Spain.
Europe’s second largest telecoms firm by market capitalisation said it was now “prioritising the capture of growth opportunities in its markets”.
Earlier this week Portugal Telecom rejected a €5.7bn (£4.9bn) offer from Telefonica to buy out its share in Brazilian joint venture Vivo.
Telefonica’s net profit rose two pe cent to €1.66bn. Total revenue increased 1.7 per cent to €13.93bn.
It has kept its head above water during a global downturn by offsetting declining profit in recession-hit Spain with more robust earnings elsewhere and limiting investment outlay.
In Spain, hit by a severe recession which has put almost one in five out of work, revenue fell almost six per cent. Spain accounts for about one third of core profit.
In the rest of Europe, where the firm operates under the O2 brand, revenue increased 7.4 per cent to €3.49bn.
Latin American units continued to perform well, with revenue accelerating 4.2 per cent to €5.62bn.
Telefonica said the first-quarter showed that its revenues growth trend had continued to speed up, but that marketing activity had been stepped up amid tougher competition. European head Matthew Key said the firm had not suffered from the loss of its exclusive iPhone contract with Apple.