In reference to the Telefonica case set out in the text book (and referred to above)
QUESTION 1: What changes in the political and economic environment allowed Telefonica to start expanding globally?
QUESTION 2: Why did Telefonica initially focus on Latin America? Why was it slower to expand in Europe, even though Spain is a member of the European Union?

After being a stated opwned monopoly until 1990s, Telefonica started an aggressive international expansion in the late 1990s due mainly because of a wave of deregulation and privatozation processes aroun d the world. This expansion process was mainly focus in Latin Amrica because its cultural ties with the region and the deregulation and privatization processes that where occurring in the region, similar to the one made in Spain that brought Tleefonica to be a private com-pany. The expansion didn’t start in Europe, mainly due to a tacit agreement between te;lecommunication companies in Europe, that stated that they shouldn’t invade each other’s market.
( Youngs, R 2000 )“ The single market had opened the floodgates to EU investment to come pouring into Spain. In order to survive, Spanish companies were obliged to begin looking for new markets. Few companies in Spain were competitive enough to prosper in other parts of the EU, needing easier markets elsewhere [CEPAL, 1997: 92]. This was a more robust explanation of Spanish FDI trends than those predicated on cultural factors. While frequently alluded to, the role played by cultural and linguistic commonalities was difficult to quantify and was seen by most Latin American policy-makers as deliberately overplayed by Madrid [Russell, 1999: 24]. If they did not themselves provide the incentive for the explosion in Spanish FDI, cultural factors did, however, help Latin America become the natural focus for Spanish companies seeking for the first time to establish a significant international presence. This was compounded by the tendency for Spanish companies, tentative in their first excursions abroad, to 'cluster' in areas where other Spanish firms had already established a presence: this helps explain the concentration of investment in a small number of sectors and countries within Latin America - up to 1996, over 60 per cent of Spanish investment in Latin America was concentrated in two countries, Argentina and Peru [BID-Irela, 1998: 111). The pressures on Spanish companies to internationalize also fortuitously coincided with the launch of privatization processes in a number of Latin American countries. It was, however, the relative disinterest in Latin America on the part of other European countries that played a major part in facilitating Spain's success in the region. Spanish companies invariably took the vast majority of funds available under Commission programmes aimed at enhancing investment flows to Latin America (such as Al-Invest and ECIP) (Agence Europe, 25 Feb. 1999, p.8). At the same time they benefited from the lack of a comprehensive Europeanization of investment promotion - still primarily a national competence - which would have levelled out the more generous incentives provided by the Spanish government relative to those on offer to other European companies. Indeed, the private sector was worried that the government's efforts to awaken greater European interest in Latin America might work to Spain's disadvantage, given the extent to which the latter's success was due to the lack of effort from other European investors (interview, CEOE, Madrid, Sept. 1999).”

Created in 1920, stated owned monopoly until 1990s. privatized and deregulated, started looking for growth, first latin America because there was a wave of deregulation and privatization, because of historical and cultural ties with spain, language. Also latyin America after decades of slow growth was growing rapidly increasing the adoption rate and usage of traditional fixed telecommunication services, mobile phones and internet connections.
Having already transormed itself from being state control to a afficient and effective competitor, they tough of doing the same acquiring latin americas telecom monopolies. In late 1900s, ionvested 11 billiuon in latam.
Latam newlo open marklet.s

1. http://www.economist.com/node/13579705 2. Jones, SL, Megginson, WL, Nash, RC & Netter, JM 1999, 'Share issue privatizations as financial means to political and economic ends', Journal of Financial Economics, vol. 53, no. 2, pp. 217-253 3. INVERSIONES DIRECTAS ESPNOLAS EN AMERICA LATINA . 2015. INVERSIONES DIRECTAS ESPANOLAS EN AMERICA LATINA . [ONLINE] Available at: http://www.eumed.net/ce/rcb-inv.htm. [Accessed 13 May 2015]. 4. MEDINA, M. (2001). Key Factors in the Expansion of Spanish Communication Groups in Latin America. Communication & Society 14(1), 71-99. 5. Gershon, R 1993, 'International deregulation and the rise of transnational media corporations', Journal of Media Economics, vol. 6, no. 2, pp. 3-22.

6. “En 1997 la inversión en Latinoamérica constituyó el 48.21% de la inversión española, y en 1999 -ocho veces mayor que la de 1997- significó el 63,10%” Boletín Económico de ICE, nº 2655, del 5 al 11 de junio de 2000, p. 36.

7. Direct foreign investment (OTI) refers to the ownership of a company in a foreign country. This includes the control of assets. As part of its commitment, the investingcompanywilltransfersomefits managerial, financial and technical expertise to the f6reigRK>wned company (Grosse and Kujawa, 1988).
Grosse, RE & Kujawa, D 1995, International business : theory and managerial applications, 3rd edn, Irwin, Chicago.

8. Dymsza, WA 1984, 'Trends in Multinational Business and Global Environments: A Perspective', Journal of International Business Studies, vol. 15, no. 3, pp. 25.
The decision to invest abroad can be a riskyp roposition because the TNC is subject to the laws and regulations of the host country. It is vulnerable to any future changes in thehostcountr/spolitics and policies. DFIcanonlyoccur if ttie host country is perceived to be politically stable,provides sufficient economic investment opportunities and has business regulations that are considered to be reasonable (Dymsza, 1984).

9. Youngs, R 2000, 'Spain, Latin America and Europe: The complex interaction of regionalism and cultural identification', Mediterranean Politics, vol. 5, no. 2, pp. 107-128.