Ladies and gentlemen, shareholders, good morning, everybody? First, I would like to thank you for your trust in Telefónica, which makes clear with your attendance at the general shareholders meeting through the channels for remote attendance. As was the case last year, these channels have been activated in view of the situation arising from COVID-19 health crisis in order to offer our shareholders all appropriate means for the exercise of your rights. Let's begin the meeting. I would like to inform all attendees that pursuant to the Companies Act, the board of directors has requested that Mr. José Miguel García Lombardía, notary of the Association of Public Notaries of Madrid, be present to certify the minutes of this meeting. Mr. García Lombardía is present in this room. The Secretary has the floor.
Good morning? Further, in compliance with the legal formalities to be observed, we hereby state for the record that in Madrid at 11:00 A.M. on April 23, 2021, at the offices of Telefónica, S.A., located at Distrito Telefónica, Ronda de la Comunicación, sin número, Auditorio del Edificio Central, there is a meeting on second call of the presiding committee of the ordinary general shareholders meeting of Telefónica, S.A., called by resolution of the Board of Directors, dated March 17, 2021. By means of the communication of other relevant information published on March 18, 2021 on the website of the Spanish National Stock Market Commission and on the company's website, www.telefonica.com, and by means of announcements published on March 19th, 2021 in the newspapers El País and Expansión, in which all the matters submitted to the shareholders for approval at this meeting are listed.
The presiding committee of the General Shareholders Meeting is made up of Mr. José María Álvarez-Pallete López, Chairman of the Meeting in his capacity as Chairman of the Board of Directors, and myself, Mr. Pablo de Carvajal González, Secretary for the Meeting in my capacity as Secretary of the Board of Directors, both being currently in office and with our positions recorded with the Commercial Registry. Mr. Ángel Vilá Boix, Chief Operating Officer of the company, is also physically present at this General Shareholders Meeting while the other Directors of the company attend via electronic means.
As regards the quorum for this meeting and as stated in the announcement of the call to meeting and on the corporate website, www.telefonica.com, the process of registration for remote attendance at this meeting ended at 9:00 A.M. today, April 23, 2021, which, together with the result of the calculation of the distance votes cast and the proxies granted, allows us to determine that there is a sufficient quorum to validly hold the ordinary general shareholders meeting on second call, which can therefore begin.
The final information on shareholder attendance at this general shareholders meeting has been prepared by an entity external to Telefónica, Sociedad Anónima, namely the well-known firm Indra S.A., which has performed the review and analysis of the remote attendance, the distance votes, and the proxies, which are also available to the shareholders wishing to review them and which has been delivered to us final data with the following results. 2,739 shareholders present, holding 108,962,552 shares. 26,324 shareholders represented by proxy, holding 336,233 shares. In total, present or represented, 29,663 shareholders holding 300,389,558 shares, and of which they represent 56,8973% of the share capital of the company, Telefónica, S.A. The share capital of the company amounts to EUR 5,526,431,062, represented by the same number of shares.
There is thus a sufficient quorum for this ordinary general shareholders meeting to be validly held on second call and for the discussion of the matters included on the agenda.
In view of the information provided by the Secretary, I hereby declare a valid quorum to exist for this ordinary general shareholders meeting on second call. The notary has the floor.
Thank you, Mr. President. Ladies and gentlemen, shareholders, in compliance with the provisions of commercial law, I hereby ask the attendees whether they have any reservations or protests with respect to the statements regarding the number of shareholders attending the meeting and the capital present and represented by proxy. If there are any, you can report them to me now using the remote attendance application.
I hereby inform you that there have been no reservations or protests with respect to the statements made by the Secretary regarding the number of shareholders attending the meeting and the capital present and represented by proxy.
There being no objections of any kind to the matter raised by the notary, I confirm that the General Shareholders Meeting of Telefónica, Sociedad Anónima is validly established on second call in order for the shareholders to discuss and decide all the matters included on the agenda. The Secretary has the floor again.
The resolutions proposed by the Board of Directors to all of you, ladies and gentlemen shareholders, are those included in the documentation that has been available to you since the date of the call to the General Meeting, both on the website and at the registered office of the company.
The shareholders are reminded that the full text of the proposed resolutions submitted to a vote is available to them in the application for remote attendance at the meeting. Moreover, pursuant to applicable legal provisions, the shareholders at this general shareholders meeting must be informed of the following matters. First, information must be provided regarding the amendment of the regulations of the Board of Directors of the company, which was approved by the Board of Directors at its meeting held on December 16, 2020 and recorded at the Madrid Commercial Registry on January 18,2021. The main purpose of such amendment was to, one, adapt the regulations to the recommendations of the Code of Good Governance amended in June 2020. Two, to adapt it to certain recommendations of the Good Governance Code not amended in June 2020, in which the company had already been complying with.
Three, to incorporate some complementary aspects and technical clarifications. Among other questions, some aspects relating to the composition of the Committees of the Board of Directors, the functions have been adjusted and new ones have been assigned to the Audit and Control Committee, the Nominating, Compensation and Corporate Governance Committee, the Sustainability and Quality Committee, and the specific regulation for the Strategy and Innovation Committee has been included in the regulations. The text resulting from the amendment is available to you on the company's corporate website.
Second, we must inform you about the company's annual corporate governance report for fiscal year 2020, which has been prepared in accordance with the regulations established by the Spanish National Stock Market Commission and which has been included in the management reports that are attached to both the individual annual accounts of Telefónica and the accounts of its consolidated group, all of them for fiscal year 2020.
In the aforementioned annual corporate governance report, which has been prepared for the second year running without following a standardized format, the company provides detailed information regarding various matters related to its corporate governance, including the following: The ownership structure of the company, the rules governing the conduct of the general shareholders meeting, the management structure of the company, detailed information regarding related party transactions and intergroup transactions, the risk control and management systems that the company has established, the internal risk control and management systems regarding the financial information reporting process, and the level of compliance with corporate governance recommendations. This annual corporate governance report was registered with the Spanish National Stock Market Commission on February 25, 2021, and has been available since then on the website of the company.
At this point, I give the floor to the chairman in order for him to report on the company's corporate governance, and in particular, on the company's level of compliance with the recommendations of the Good Governance Code.
As set out in the annual corporate governance report for fiscal year 2020, Telefónica complies with practically all of the recommendations of the Good Governance Code with the following provisos. Firstly, I inform you that the board of directors of Telefónica is convinced that the limit on the maximum number of votes that a single shareholder may cast, 10% of the total share capital, as stated in Article 26 of the bylaws, is an effective tool to protect the interests of all minority shareholders.
Moreover, with regard to the number of members of the Board of Directors, the complexity of the organizational structure of the Telefónica Group and the wide variety of sectors in which it carries out its activities justify the number of 17 members on its Board of Directors. Similarly, and in the same regard, Telefónica, S.A. is one of the largest companies listed on the Spanish stock mark exchanges by market capitalization and has shareholders with large holdings in absolute value terms, which is the reason why, in terms of proprietary directors, Telefónica cannot adhere to strict proportionality criteria when determining the composition of its Board.
Likewise, with respect to the, it should be pointed out that the Appointment, Compensation and Corporate Governance Committee is a single body, and to date, there has been no discussion of splitting it up in order to favor coordination and ensure that it continues to work efficiently. In addition, the Audit and Control Committee and the Nominating, Compensation and Corporate Governance Committee are chaired by independent directors as provided by law. In the other committees whose purview covers matters related to the company's business and management issues, it has been considered appropriate that they form part of the proprietary and other external directors in order for them to contribute their technical knowledge and specific experience.
Moreover, and as can be seen in the company's public information, the directors and officers held very significant interest in the capital of Telefónica, S.A. as of December 31, 2020, which shows their commitment to Telefónica and the alignment of their interests with those of the shareholders. Similarly, the policy of remuneration of the Directors approved by the shareholders at the general shareholders meeting held on June 8, 2018, includes the commitment of the Executive Directors to maintain a number of shares equal to two payments of annual gross fixed remuneration for so long as they have such status.
In addition, in order to increase the executive director's level of commitment, and also in compliance with recommendation 62 of the Good Governance Code, the new directors remuneration policy submitted for approval at this AGM maintains the aforementioned commitment to hold the number of shares equivalent to two years' gross fixed remuneration.
Also establishes that until the number of shares subject to this commitment has been reached, the shares received under any variable remuneration element shall be subject to a minimum retention period of three years, as required by the aforementioned recommendation 62. Moreover, it should be highlighted that the Appointment , Compensation and Corporate Governance Committee has the power to propose to the Board of Directors the cancellation of payment of variable compensation if such payment has not been in line with performance criteria, or if such compensation has been paid based on data that are subsequently proven to be incorrect.
In this regard, it should be noted that the new directors' remuneration policy submitted to this AGM for approval establishes a standardization of the malus and clawback clauses, which will be applicable to any variable remuneration item promoting prudent risk management in line with best practices in corporate governance and in the market. The company also continues to move forward along the path of adjusting its remuneration policy in line with the highest standards. With regard to severance pay, the terms and conditions in the contracts with the Executive Directors are the same as those in their previous contracts upon the terms described in the annual corporate governance report.
Notice is given of the annual report on remuneration of directors of Telefónica for fiscal year 2020, which was prepared and approved by the board of the company at its meeting on February 24, 2021.
In accordance with the proposal made by the Appointment, Compensation and Corporate Governance Committee, which was also registered on February 25, 2021, with the National Securities Market Commission and has been available on the company's website from that date. Finally, you are hereby notified that the full written text of the report that the Chairman will now present at this ordinary general shareholders' meeting will be published on the website and made available to the shareholders.
[Presentation]
Ladies and gentlemen, shareholders, a very good day to you all. In 1985, Telefónica described the future with the following words: The telephone of the future will dial a number just with the voice of the user, and the homes of users will be equipped to broadcast images and data simultaneously, and it will be possible not to break up communication with others. We'll have tele-alarm systems to act, and in the company, there will be employees who work from home, and there will be the possibility of holding meetings without having to travel anywhere.
Our customers will regularly do their purchases from their homes. Classrooms will be PCs on each desk, and there will be video and computing programs for all classes. In big hospitals, improvements will be through the overseeing of patients in their homes and the possibility of distance diagnosis. The use of telematic handsets and phones in vehicles will also be progress. Telefónica, 1985. Those networks that Telefónica knew about 35 years ago have been built before anybody else has done this, and voice has been transformed into light and image. That change, it goes a lot further than that, and a lot more quickly than we ever imagined then. Previously, I have said what the huge technological progresses we've made, it is changing everything. The pandemic, instead of stopping that change, has actually accelerated that change. 2020 has been a year that we will never forget.
It has made us live through one of the greatest crises we've ever seen as individuals and as a society, and it's left a vacuum of those who are no longer with us. Also, we've seen exemplary actions from ordinary people who have been great heroes. We've had to take refuge in our homes and has created a great deal of tension that we never imagined. The pandemic has made us stop fearing digitization, and it changed our behavior at work, in our purchases, and in education. It has shown that there are not two lives, an analog and a digital life. There's a single life, and it is expressed with the resources we have to hand. The growth in volume of data that our networks transports has multiplied by two almost in a year.
In Spain, electronic commerce has grown by 40% to streaming too, and work by 75%, telework. Everything, people, homes, and businesses have changed. Digitization is irreversible and unstoppable. It has not just been a passing phenomenon. Quite the contrary, digitization has accelerated as a response of the pandemic and is showing the way forward for the future of our societies. To a certain extent, we can say that the crisis has allowed us to surpass this crisis. During confinement and lockdowns, digitization advanced as much as it had done in five years. For every month of confinement and lockdowns, we made progress of a year in terms of digitization. The post-COVID world is a lot more digital. It has been confirmed that the connectivity of our sector is vital and will be increasingly so.
The future that Telefónica saw in 1985 is already with us, and it is now, when the leadership of Telefónica in infrastructures and digital platforms is even more important. This leadership is not just by chance, it is the result of a meditative strategy over time. The decision to foster fiber is clear, but in 2008, it was a brave and risky decision. We had an intuition of what the changes would be, and we moved in that direction in a coherent fashion. We had a commitment, a vision, and there was no greater commitment than to invest in technological infrastructures in those societies where we operate. Our investments of more than EUR 95 billion has made us leaders in fiber in Europe and Latin America, with 135 million passed homes with fiber.
We have achieved almost 100% coverage with 4G in our key markets, and we're already deploying 5G in an accelerated fashion. Over these months, it has become clear to us that what we are transporting through our networks are not fiber megabits and gigabits, it is the impulse of a society, the pulse of society. There's a digital world, thanks to the telecommunication sector, where we have a great responsibility, but also it's a great privilege for us because we're part of the solution to overcome the crisis and to open up new opportunities for the future. Telefónica has not been immune to this crisis. We have suffered, too, but we have shown ourselves to be very resilient. Our sector was very much affected, and we were one of the sectors that suffered with a big impact, and the share price was no exception.
We had a drop in economic activity and this affected exchange rates. We did suffer, but we reacted and we knew how to manage the situation. We did not give up. Quite the contrary. We doubled our efforts, we showed the best of ourselves. We used our resources, expenses, we gave priority to the most profitable projects, we improved our operating margin for the fifth consecutive year and made EUR 5 billion in 2020 and EUR 25 billion accumulated in the last five years. The big investments made in the last few years have allowed us to be resilient and to reduce our indebtedness. In December 2020, our debt was at EUR 17 billion, under the level from 2016. In addition, the inorganic initiatives announced will allow us to continue to reduce this in the next few months.
Net debt will be, in a short time, at around EUR 26 billion, less than half that we had five years ago. In an exceptionally difficult year such as 2020, this is the biggest test we have put ourselves through. We've increased our net profits by 40%, by EUR 1.6 million. In November 2019, I announced the five strategic initiatives that made up the action plan on which the management of the company should focus. Its main objective was to strengthen the group and to be more relevant in the life of our customers and stakeholders. When we designed the plan, we announced it, and we didn't know that a couple of months later, we would face up to such an exceptional situation. The pandemic surprised us with this new plan. We didn't park it, though. We didn't even slow things down. Quite the contrary, accelerated things.
I remind you that to begin with, we decided to focus on our four key markets that represent 80% of our revenues. In all of these, we have seen better performance than that of our competitors. We have improved customer satisfaction and we have done transforming projects. In Spain, in fiber, we've deployed 5G that has made us cover 80% of territory in just four months. This shows the great leadership we have in the state-of-the-art networks, both in Europe and on a global scale. In the U.K., our agreement with Liberty Global is the biggest transaction in our history. We'll create a leader in connectivity in that country. In Brazil, we strengthened our leadership with the purchase of Oi's assets with Oi and Claro.
In Germany, we created a fiber company with Allianz and with the agreements with Deutsche Telekom, we've opened up new markets for growth in this European market. The second initiative focused on our presence in Hispam. In just a year, we've reduced by 20% the capital employed in the region, focusing on the profitability, efficiency, and the capture of the most value from our assets. We've announced the sale of our project in Costa Rica, and we want to accelerate digitization and efficiencies while we leave our options open. The fourth initiative of our plan brought Telefónica Infra forward. Sorry. Our third strategic initiative is Telefónica Tech, and it is growing by two digits. In just a few months, we've created two native digital companies dedicated towards cybersecurity, the cloud world, big data, and Internet of Things.
The fourth initiative of our plan brought forward Telefónica Infra, and this new company is being able to maximize the deployment of our infrastructures. Together with the agreements with Allianz in Germany, CDPQ in Brazil, and KKR in Brazil, this is the success story of Telxius. The sale for EUR 7 billion or EUR 7.7 billion, has become a benchmark in the world. Fifth place, 2020 showed the progress in the deployment of a new operating system, fostering radical digitization of our operations. 80% of our processes are already digitized, and 30% of our digital sales are taking place in digital channels. All this is improving the customer of our 345 million customers. Our networks have been part of the solution up against this huge challenge we're up against, and it has allowed us to achieve, in the most difficult years, some record levels of satisfaction amongst our customers.
We have also made progress in our sustainability goals, being pioneers in deploying the first green hybrid bond and sustainable hybrid bond. We're moving forward to a more diverse company. We have on our board 30% of excellent lady Board Members and women in leadership positions. Our history is through of unique moments. In 2020, this has been a very special year, and when we've been needed, Telefónica has made available to society the best it has, its people and its networks. Ladies and gentlemen, shareholders, we are moving into a new era. The accumulation of technology in our societies has no precedent in the history of humanity. The computing power and storage of data is growing exponentially year by year with Internet of Things, blockchain, cloud computing, deep learning, voice recognition, reading images, 3D printing, and many other things are advancing hugely.
Telecommunication networks that are state-of-the-art 4G and 5G multiply the capacity to transport that information and also the speed at which it's transported, and it reduces latency. That opens up a whole new world of opportunities. 5G is the door to a whole new world. It allows us to access the responsible world of technology. We're going into the world of artificial intelligence. 5G will allow us to have 8K quality videos in watching sports as if we were physically present in stadiums, or it will allow, with augmented reality, for our children to study classical civilizations by walking along classical Rome in a virtual manner. It eradicates the response time. There's no latency, hardly. In driverless cars, a millisecond is the difference between 20 m or 40 m in braking, and it can be the difference in life and death.
The combination of fiber and 5G will mean a huge industrial revolution. The factories will become automated and be smart and can be configured. It will open up unprecedented possibilities, and there will be thousands of robots and mobile elements in a factory that will use artificial intelligence and the data of millions of sensors in real time. All of this is not fiction. It is already a reality in Telefónica. The company has developed the first private industrial network, 5G in company and with Navantia in Ferrol too, and we're pioneers in 5G coverage in the best stadiums in the world. Our networks have changed, and they will change even more. They're new, powerful, speedy networks with a great capacity and extremely smart. Technologies such as edge computing is making this the backbone of the technological transformation process, the real backbone of future societies.
Based on these networks, based on the know-how and needs of our customers, we will enrichen our value proposition. We want to offer them, in a customized manner, a new world of possibilities with the aim of increasing the trust placed in Telefónica and to gain more relevance in our customers' lives. This is the first technological revolution that is found in our country. It is a golden opportunity that Spain can lead this fourth industrial revolution, particularly when Europe has set down the digitization being at the heart of this new revolution. Europe is offering us a historic opportunity to ensure that our country can face up to a fundamental transformation that will allow the digitization of companies and public administrations. Digitization is a synonym of growth and quality jobs, sustainability and inclusion.
Its potential will allow us to increase GDP by 2.5 percentage points per year up until 2025, and to increase productivity of SMEs between 15% and 20%. Digitization is key to face up to the other big challenge that our societies face up to energy transition.
Digital services will help our customers to pollute with 5 billion fewer tons of CO2. I'm very optimistic about the future because we have all of what we need to be stronger and to work together with the support of Europe. Telefónica is working harder than ever to achieve this and has the attributes to be a big part of this transformation. The world has changed. Technology is here. Now is the time for values. Every day, we generate a huge volume of data. We are using data radically different than we're used to. We're not conscious of how much we're exposed because there are no transparent rules at the time, for the time being. We now have data. Data are part of our dignity. They cannot be expropriated without our explicit permission.
We, each one of us, own our privacy, and we have the right to know who and for what our data are being used. We have the right to know what they're worth and decide sovereignly if they're used or not, and who will benefit from their value. These are the new rules for this new world. We need to define a new social contract that establishes the rules and rights in the digital space. In 2024, Telefónica will celebrate its 100th anniversary, but our company is still young. From voice to data, broadband, we're taking huge steps to cover the next 100 years with guarantees. At the beginning, I talked about the present as an important part in our history, an important moment in our history. From now until 2024, we'll say goodbye to our copper network.
We will be the first company in completely closing the copper network to use only fiber. We'll have the 5G networks and say goodbye to 2G and 3G. We're virtualizing things that are networks to think for themselves. We'll put digitization in the center of societies to create a more human world, connecting the lives of people. Our legacy is everything that still lies ahead of us. At the point of our 100th anniversary, we have this innate vocation to And we will update our logo type, our image. We're going to have a new, more flexible image. In defining this new identity, we have gone back to one of the symbols that we used in the past. It reflects where we came from, and we're organizing society through telecommunications, and it shows where we're moving towards, a more technological company.
It reflects the DNA of the company of renovation and transformation. It reflects the soul of the company, the talent of the professionals who are working in our company. It reflects the importance of everything that we do, of our purpose. In short, this new identity that reflects a new Telefónica prepared for the next 100 years, and this will identify us in this new project that we are embarking upon. There's time to let things happen. 35 years ago, Telefónica knew how to see the future, and we stayed ahead of it. As we approach our 100-year anniversary, we're going to leave these new generations with our new company, and we'll continue to look towards the future. Winds are changing, and now we have our biggest sails to use these new winds. The important thing is the route that we establish.
We have to know where we are going. 35 years ago, Telefónica knows where it is heading towards the future. Fantastic things will happen through our networks that are unimaginable when that advertisement was first released. We're emerging from one of the greatest crises with the satisfaction and pride that we have completed our mission, and with a technological company that's ready to conquer the future. We have the memory of how to build this and the talent and teams to better do this. I'm extremely grateful to each and every one of the people that form Telefónica's team. Telefónica is huge because you make it huge and important every day. I'd like to remember the lives of our colleagues that were lost to the pandemic. These same networks are transmitting our gratitude to the transformation that they have made to Telefónica. Thank you very much.
As regards the process for voting on the proposed resolution submitted to the shareholders for approval at this general meeting. Please note that in order for the public solicitations for proxy representation to be effective, those Directors who might be affected by potential conflict of interest will cast their votes in accordance with the specific instructions given by the shareholders they represent. If the shareholder being represented has not given specific instructions, or if the instructions given are ambiguous, the D irector will not exercise the right to vote attaching to the shares represented thereby, and it will be for the secretary for the general meeting to exercise the right to vote attaching to such shares.
In addition, as stated in the announcement of the call to the meeting and on the corporate website, shareholders or their representatives attending the general meeting remotely have been able to cast their votes on the proposals regarding items included on the agenda from the time that the chairman declared the meeting to be validly established. In any event, the process of voting regarding all of the proposals submitted at the meeting will end after the summaries of such proposed resolutions have been read aloud.
As regards to proposals included on the agenda pursuant to the regulations for the general shareholders meeting, it is not necessary to read a full or summarized version of the proposed resolutions if the text of such proposals has been provided to the shareholders at the beginning of the general meeting, as has been the case today, given that such proposed resolutions are available in the application for remote attendance at the meeting. In the interest of providing greater agility to this event, I will limit myself to presenting to you the most important texts of the proposed resolutions. The full text of these proposed resolutions, which the shareholders can access through the remote attendance application, will be included in the notarized minutes of the meeting.
First, approval of the annual accounts and of the management report of both Telefónica, S.A. and its consolidated group of companies for fiscal year 2020. The approval of the annual accounts. To approve the individual annual accounts, balance sheet, income statement of changes in shareholders' equity, cash flow, et cetera, of Telefónica, S.A. and its companies corresponding to 2020 as formulated by the Board of the company in its meeting of February 24 ,2021. I.2. Approval of the statement of non-financial information of the consolidated group of companies led by the approval of the management by the Board of Directors of Telefónica, S.A. corresponding to 2020, including the consolidated management report of Telefónica, S.A. and of its group of companies for such fiscal year. 1.3, approval of the management of the board of directors of Telefónica.
To approve the corporate management of the board of directors of Telefónica, S.A. during the fiscal year 2020. Second, proposal regarding item 2 on the agenda: approval of the proposed allocation of the profit losses of Telefónica, S.A. for fiscal year 2020. Compensating the loss of EUR 1.685 billion against voluntary reserves. Proposal regarding item 3 on the agenda, re-election of the Statutory Auditor for fiscal 2021. Pursuant to the proposal made by the Audit and Control Committee, the Board of Directors submits the following resolution for approval at the general shareholders meeting. This is for 2021. This is signed by PricewaterhouseCoopers. 4. re-election of the board members. 4.1, to re-elect José María Álvarez-Pallete as Director of the bylaws mandated for four years. 4.2, to re-elect for the same four-year period, Ms. Carmen García de Andrés as an Independent. Re-elect for four years, Ignacio Moreno Martínez as a member.
To re-elect for four years, Mr. Francisco José Riberas Mera as an Independent. Fifth, reduction of the cancellation of its own shares, excluding the right of creditors under Article six. We're proposing to reduce the capital by 82,896,466 shares by means of the cancellation of 82,896,466 own shares of the company currently held as treasury stock, representing approximately 1.5% of the company's current share capital. The reduction in share capital will not entail a return of contributions to the shareholders, since the company itself is the owner of the shares, which, where appropriate, will be canceled and will be made with a change to unrestricted reserves by means of the funding of a reserve for canceled shares capital in an amount equal to the par value of the canceled shares under the Companies Act.
Accordingly, as laid down in such section, the creditors of the company will not have the right to oppose the reduction mentioned in Section 334. It is hereby stated for the record. This reduction of capital will be executed within one year from the adoption of the agreement. Sixth, two proposals for scrip dividends. Two proposals for shareholder remuneration by means of scrip dividends are proposed. To that end, two share capital increases are proposed to be charged to reserves for the amounts to be determined according to the terms of the proposals.
Through the issuance of new common shares without issue premium of the same class and series as those currently outstanding and with provision for incomplete allocation in order to offer shareholders the option of receiving the remuneration corresponding to the second payment contemplated in the remuneration policy for the 2020 financial year and the first payment contemplated in the remuneration policy for the 2021 financial year by means of bonus shares.
Seventh, proposal regarding item seven on the agenda, amendment of the bylaws. A series of amendments to the company's bylaws are proposed, grouped in two blocks, each of which is submitted to a vote as a separate item on the agenda due to the specific matter to which they refer. The purpose of the first block is to enable the possibility of holding the General Shareholders Meeting exclusively by telematic means in the event that the law so permits and under the conditions set forth therein.
The second block is intended to expressly regulate the possibility of granting proxy and casting the vote prior to the general shareholders meeting by telephone, both mechanisms that the company already implemented at the general shareholders meeting held on June 12, 2020, to promote the participation of shareholders in the meeting and in response to the health crisis situation caused by COVID-19, and has also offered again on the occasion of the General Shareholders Meeting. Proposal regarding item eight on the agenda, amendment of the regulations of the General Shareholders Meeting. In line with the proposed amendments to the company's bylaws, a series of amendments to the regulations of the company General Shareholders Meeting are also proposed, grouped in two blocks, each of which is submitted to vote as a separate item on the agenda due to the specific matter to which they refer.
The purpose of each block of amendments is the same as that set forth above, for which of the blocks in which the amendment of the bylaws is divided. On the one hand, to enable the possibility of holding the general shareholders meeting exclusively by telematic means in the event that the law so permits and under the conditions set forth herein, and on the other hand, to expressly regulate the possibility of granting proxies and casting the vote prior to the general shareholders meeting by telephone. Ninth, proposal regarding item nine on the agenda, approval of the Telefónica, S.A. directors' remuneration policy. It is proposed to approve the remuneration policy for the directors of Telefónica, S.A., which will come into effect on the date of its approval by the General Shareholders Meeting and will remain in force until December 31, 2023.
The full text which has been available to the shareholders together with the rest of the documentation relating to this meeting since the date of its call. Proposal regarding item 10 on the agenda, approval of a long-term incentive plan consisting of the delivery of shares of Telefónica, S.A. allocated to senior executive officers of the Telefónica Group. It is proposed to approve a long-term incentive plan consisting of the delivery of Telefónica, S.A. shares as variable remuneration and based on the achievement of the established objectives aimed at Telefónica Group executives, including Telefónica, S.A. executive directors who meet the requirements established for this purpose from time to time and who are invited to participate in the plan.
The purpose of the plan is to encourage the commitment of the participants of the company and its strategic plan, linking their remuneration to the creation of value for Telefónica, S.A.'s shareholders and to the sustainable achievement of strategic objectives, so that it is aligned with the best practices in remuneration matters, offering a competitive remuneration package that contributes to retaining the executives who occupy key positions in the group. The main features of this long-term incentive plan are as follows: The plan will have a total duration of five years and will be divided into three cycles of three years each, independent of each other. The first cycle will be considered to commence on January 1, 2021. Each participant will be assigned at the beginning of the corresponding cycle, a maximum number of theoretical shares.
The specific number of shares to be delivered will depend on the level of compliance with the objectives set for each cycle. The total maximum number of Telefónica, S.A. shares that in execution of the plan will be delivered to the participants at the end of each of the cycles will be the result of dividing the maximum amount allocated to that cycle by the weighted average price of Telefónica, S.A. shares on the 30 trading days prior to January 1 of the first year of the corresponding cycle. In any case, the total number of shares to be delivered in execution of the plan to all participants, including Executive Directors at the end of each cycle, may never exceed 0.45% of the share capital of Telefónica, S.A. at the beginning of the corresponding cycle.
The specific number of Telefónica, S.A. shares that within the established maximum will be delivered to unit holders at the end of each cycle will be conditioned by and will be determined based on the fulfillment of economic-financial objectives, the creation of value for the shareholder, as well as objectives related to sustainability, the environment or good governance. The objectives will be approved by the Board of Directors at the beginning of each cycle of the plan at the proposal of the Appointment, Remuneration and Corporate Governance Committee within the framework established in the Directors' remuneration policy. In the first cycle of the plan, the number of shares to be delivered will depend on, one, 50% compliance with the total shareholder return target of the Telefónica, S.A. share, measured in relation to that achieved by certain telecommunications companies.
Two, 40% on the generation of free cash flow of the Telefónica Group compared to the value set in the budgets approved by the Board of Directors for each year. Three, 10% on the neutralization of CO2 emissions in line with the target set to reach zero net emissions in the year 2025. The Appointment, Remuneration and Corporate Governance Committee will monitor the objectives on an annual basis, and once each of the plan cycles has been completed, the degree of achievement will be determined.
Likewise, the board of directors shall assess, following a report from the Appointments, Remunerations, and Corporate Governance Committee, whether the total or partial cancellation of the payment of the shares pending delivery and/or, 2, the total or partial recovery of the shares delivered within 24 months after their delivery in the event of certain exceptional circumstances affecting the company's results or deriving from inappropriate conduct by the Executive Director. In order for each of the unit holders to be entitled to receive the corresponding shares, he or she must maintain an employment or commercial relationship with the Telefónica Group on the date of delivery of each cycle, without prejudice to any exceptions that may be deemed appropriate, and must have been linked to the group for at least one year.
The delivery of the shares, which may be Telefónica, S.A. treasury shares or newly issued shares, will take place at the end of each cycle, that is, in 2024, 2025, and 2026. 100% of the shares to be delivered will be subject to a two-year retention period, which will be extended to three years as long as the number of shares subject to the permanent shareholding commitment has not been reached.
Proposal regarding item 11 on the agenda, delegation of powers to formalize, interpret, remedy, and carry out the resolutions adopted by the shareholders at the General Shareholders Meeting to authorize on a several basis the Executive Chairman of the Board of Directors, the Chief Operating Officer, the Secretary of the Board of Directors, and the Deputy Secretary of the Board of Directors, such that, without prejudice to any of other delegations included in the foregoing resolution and any existing powers of attorney, to convert resolutions into public instruments. Proposal regarding item 12 on the agenda, consultative vote on the 2020 annual report on Directors' remuneration to approve on a consultative basis the annual report on Directors' remuneration for fiscal year 2020.
The full text of such report has been made available to the shareholders, along with the other documentation relating to this General Shareholders Meeting since the date of call to meeting. The reading of summaries of the proposed resolutions, having been completed as stated earlier in the announcement of the call to meeting, voting by those remote attendees who have been able to cast their votes since the meeting was declared to be validly established, has now finished with respect to the proposed resolutions included on the agenda.
In addition, as announced, the shareholders and their representatives who are exercising their rights have wanted to participate in this AGM, who have request information or clarifications on any points in the agenda and require any clarification on any information accessible to the public that has been provided by the Securities Committee before, or who would like to submit proposals, have been able to do so since this registered on the remote platform through the forms that have been provided for this. Likewise, the remote representatives have been able to express their questions or proposals up until the time the president has validly constituted this AGM. Likewise, the shareholders or their representatives attending remotely have also been able to express their desire for their presentation to be recorded in the minutes of the meeting.
I now proceed to read a summary of the issues raised by the shareholders, grouping them by subject in those cases where appropriate, and the chairman will then provide the appropriate responses. In any event, pursuant to Section 182 of the Companies Act, requests for information or clarification made by remote attendees will be answered in writing within seven days of the conclusion of this meeting. In this regard, I inform you that the shareholders, Mr. Enrique Checa Serrano, Mr. Mens [pele], Santiago Carrero, Chairman of the Elderly Association in Spain, representing Mr. Luis Cifuentes, Mr. Domínguez Jiménez, Mr. Norman López-Manzanares, Mr. José María Carretero, Mr. Matías Martín [Guijarro], representing Giltime, Mr. Jacinto Miguel Ferrero, and Mr. Adrián Gallego, and Mr. Castro, Miss Juan Jesús García, and Mr. Buenaventura have declared that they would like to intervene through the methods enabled to do so.
The requests for information that the above-mentioned shareholder had raised are mainly concerned with the following issues. The strategy followed in terms of inorganic transactions, the dividend policy and repurchase plan from the company, the performance of the share price, the new business units, Telefónica Tech and Telefónica Infra, the strategy in terms of sustainability. As I indicated earlier, I now pass the floor to the Chairman to give an aggregate response to the requests for information that have been raised, all this without prejudice to the fact that all these will be answered in writing within seven days of the termination of this General Shareholders Meeting.
We'll now reply to those issues raised that are related to the agenda for the general meeting, and in the interest of greater clarity, I will, to the extent possible, group such replies together according to the matters to which they refer.
In terms of the strategy followed by the company in terms of inorganic matters, 2020 has been a record year, and in the first few months of 2021, apart from putting a brake on, we have gone first, faster.
This is an historic operation worth more than EUR 38 billion. It allows us to be a leader in connectivity in that market with 48 million customers and EUR 11 billion in revenues, and using the best infrastructures of the market to continue providing the best services, will allow us to crystallize important synergies worth EUR 6 billion. This is 17% of the capitalization of Telefónica, and it creates value for shareholders, which is now reflected in the share value. In Brazil, Telefónica is playing a very active role in the consolidation of the market. They offered, together with TIM and Claro, won the competition for the mobile services of Oi. Once that was completed, this reinforces our customer base of Vivo, which is a leader with more than 10 million additional customers, and underscoring our leadership and synergies.
In terms of the sale of Telxius towers for EUR 7.2 billion, the multiple is a milestone in the sector. We have a capital gain between EUR 3.5 billion and debt reduction of EUR 4.6 billion. This optimizes our financial flexibility. Also, Telefónica Infra has focused on developing opportunities for growth and value creation in laying down fiber in Germany. We reached an agreement with Allianz to create a wholesaler for fiber in rural areas in Germany, taking advantage of this being the biggest broadband market in Europe, controlled by Allianz and Telefónica, has the objective to reach more than 2 million homes, creating a 50,000-km fiber network. This is with a leading investor. In Brazil, we've built a neutral and independent fiber company outside of the city of São Paulo, and this company, FiBrasil, is participated with 50% by the Telefónica Group and has co-control.
Vivo will cover 1.6 million homes, covering 5 million homes over the next four years. In this operation, remember that the valuation of the assets provided by Telefónica Brasil is 16.5x EBITDA in 2020. Additionally, in Latin America, we've announced the launch of InfraCo in Chile with KKR, a 60% share to take advantage of the value of the asset and build upon it. We also have agreements with ATC and ATP introducing with less investment. Also in Latin America, we're selling our operations in Costa Rica. Summing up, in inorganic operations are not only reinforce our positioning in key markets, but also reduce our financial debt in EUR 9 billion additional , reaching EUR 25 billion. These EUR 9 billion account for 25% of the financial debt at the end of 2020.
For the future, we'll continue to work. We have options for other assets, several strategic alternatives in underwater cable and at Telefónica Tech that are growing. This will be a great source of the creation of value. We're working in Hispam, where we have alternatives to reduce our position in the region. Remember that in 2020, we've completed this operational segregation of Hispam. It's completely autonomous now. In terms of dividend policy, in February, we confirmed the remuneration for 2020. This was a flexible dividend, a voluntary of EUR 0.40 per share, EUR 0.20 were paid in December and EUR 0.20 will be paid in June. Now, in establishing remuneration for shareholders for 2021, we'll analyze all of the different scenarios. We'll look at the possibility of maintaining the current dividend of EUR 0.40 per share.
We'll also look at the possible reduction. We'll also think about possibly eliminating the dividend, depending on the situation. We'll probably go with EUR 0.30 dividend per share, is probably where we'll be going. This decision is consistent. We think it adapts best to our objectives. It allows us to accelerate our transformation to be able to continue investing in the growth areas, prioritizing our resources, and capture organic opportunities, while at the same time exploring inorganic options. It also allows us to participate in the spectrum auctions. Remember, this year we have auctions in three of our four key markets, Spain, the U.K., and Brazil. It will also allow us to continue to reduce our indebtedness, which is important to maintain our solid rating and give us greater flexibility. Although the expectations of the pandemic are positive, we still have uncertainties.
Bearing all of this in mind, those EUR 0.30 per share will be an attractive remuneration for shareholders and will allow us to continue to move forward in capturing future growth for the company. In terms of the scrip option, this helps us to maintain flexibility and gives us greater options. I'd like to remind you that with the recent experience of the scrip dividends, many of the shareholders are opting for this possibility. The trust in the company, and I want to express our gratitude for those that are expressing this trust in the company. We prefer to talk about the dividend policy year on year. In terms of, we're proposing the cancellation of shares accounting for 1.5% of the social capital of the company. In the future, we can use this tactically as a control remuneration under the scrip dividend, the scrip model.
In any case, we'll always maintain our credit rating. We're valuing all of this depending on our inorganic transactions and in terms of the evolution of the price share. The share price, we're convinced that the market will end up recognizing the intrinsic value of the company, and we've been working tirelessly on this. We have the strategic plan that we believe in, and we're devoting all of our efforts to build the new Telefónica to really get the best of the value of our shares. The value of our assets is worth about EUR 1 billion. Our strategic position and our geographical presence, and our leadership position in many of our assets, the immense capacity to generate cash flow. The company has last year, EUR 5 billion, but over the last five years, EUR 25 billion in cash flow.
Our liquidity, the company has a financial situation which is very stable and enviable. Our discipline in debt reduction, we've reduced EUR 17 billion since June of 2018. The relevance of our sector, as has been shown during these months of the pandemic. For all of these reasons, we're convinced that the potential of the company will be reflected in the share price, and we're using all of the levers to do this. Remember that over the last six months, the share price has risen by 23%, breaking records in our sector. It's our absolute priority for our strength to be reflected in the share price, and we are dedicating all our efforts to that.
In terms of the new business units, Telefónica Tech and Telefónica Infra, in 2020, we created Telefónica Tech, integrating high potential cloud, cybersecurity, IoT, and big data services.
We've grouped these into two native digital companies that are independent and fully operational to provide services to B2B. This model also allows us to serve customers outside of our footprint. An example is the sale of cybersecurity services through our partner, Etisalat. Additionally, we're reinforcing our own capacities and alliances with Microsoft, Google, and Amazon. We're trying to help companies in their digital transformation while we capture the growth in digital services market. Despite the impact of the pandemic, we've achieved growth in revenues, of 14% year- on- year, which trebles that of the market. In other words, we're gaining market share in strong growth markets that are essential for the future of companies. This is the year to accelerate this growth and to profit from these tech companies. This gives us options to value these units.
This unit has great value that today is not yet recognized in the share price. In terms of Telefónica Infra, we created this unit to get the value of our assets. We have powerful partners and the ability to roll out infrastructure in the towers. Telxius has become a real success story. With its sales, it has generated huge capital gains, and we still have the option that the tower company has in the U.K. Telxius continues in its portfolio to have the underwater cable that reinforces our operations with a network of 90,000 km of cable. As the chairman remarked, Telefónica Infra is fostering alternatives for the rollout of fiber that will allow us to optimize the use of capital while we accelerate growth. Also, we continue to maintain options to capture value through the data centers.
In terms of strategy and sustainability, I should say that this strategy is based on two axes: in making the world more human, connecting the lives of people, and the principles of responsible business covering not only the ethical code, but also its corporate responsibility in terms of its stakeholders and the general society. Our strategy is based on the recognition of the growing transition to a digital economy that is sustainable and committed with all of our stakeholders. The main lines of our sustainability strategy are based on three pillars. First, to generate a positive impact on progress, favoring economic and social development based on digitization. Telefónica contributed with EUR 3.31 to the GDP of the main economies where it is working for each euro of margin produced in 2020.
It has created employment. Huge amounts of employment. Thanks to the operations in Telefónica, we generated a tax contribution of EUR 8.2 billion. The second pillar, to build our greener future through sustainability issues. We're aligned with the sustainability goals to fight climate change. To do that, we're using cutting-edge networks, which consume much less energy. We're collaborating with our suppliers. To create this circular economy, we're committed to the objective of 1.5 degrees of the Paris Agreement. We have the objective of emission neutrality for CO2 for the future years. The third pillar is to lead with example in all of our activities. Telefónica is committed with generating trust, incorporating sustainability factors in the variable remuneration of our directors. Promoting the trust and sustainability in its supply chain. Fostering development of well-being of our employees.
Our main achievements in 2020 were the launch of our second green bond, CO2 reduction by 61% compared to 2015, maximum classification in the global ranking of the CDP climate change for the seventh consecutive year. The second consecutive year, we're number one in the digital rights ranking at world level. The most important challenges that we are facing are reaching the objective of zero net emissions in our main operations, to continue consuming electricity 100% renewable energy in our main markets until we reach 100% at global level by 2030, to continue moving forward of being a zero-waste company using recycling and, of course, advancing and increasing our diversity in women Directors.
In terms of Mr. Santiago Carrero, representing the elderly, to answer your question, first of all, thank you very much for your words. I would like to thank you very sincerely and the organization that you represent for the support that you give us every day. Thank you also for your solidarity during the pandemic and for how you have worked. Your work is an example and is pride for Telefónica. We're proud of you. Telefónica, during the pandemic, has provided the best it has, its people, its networks, but we feel reinforced since we're complying with this part of the mission, but also we have the feeling that we're prepared for the future. Precisely what I wanted to say to you during my presentation, you that went ahead of us 35 years ago, without your vision, Telefónica would not be where it is today, leading the cutting-edge networks.
Thanks to your vision and the work of many people and all of the people that are here now, we are in the position. From the bottom of my heart, thank you very much for everything that you do, for the example that you set, and for the company that you left for us. Please continue with your work, and you have our full commitment to collaborate with you so that we can continue to work together. The secretary now has the floor.
I am pleased to inform you that with the votes resulting from the proxies and the distance votes received prior to this meeting, regardless of the votes in favor, against, and abstentions in any case caused by the shareholders or their representatives attending this meeting in the manner indicated earlier, there is sufficient majority in each of the items on the agenda to approve all the proposed resolutions submitted by the Board of Directors to the shareholders at this meeting, so that each and every one of the items on the agenda is hereby approved. Without prejudice to the foregoing, the final voting data will be published on the company's corporate website.
The notary will certify the minutes of this general shareholders meeting, complying with all other customary legal requirements. Those shareholders wishing to read the minutes may, in a few days, request at Telefónica Shareholder Office that a photocopy of the notarized minutes of the meeting be delivered or sent to them. Thank you very much, ladies and gentlemen, shareholders. The meeting is adjourned.