The stock has appreciated sharply over the last few months. It is up 25% on a 52 week basis, and is nearly 33% above its 52 week low made in February. There have been positive opinions in support of a long term investment in Telefonica with a 2-3 years perspective. Better growth prospects in the Latin American markets, expected improvement in leverage position, relatively cheap valuations and expected resumption of regular dividends are the main reasons for the recommendation. Telefonica is doing extremely well in the Latin American markets, especially in Brazil, Argentina and Venezuela. These markets offer better growth opportunities compared to those which are relatively more regulated, saturated, and competitive. The North American market is highly competitive and the giants like AT&T an Verizon (VZ) are expected to face difficulties in growing the top and the bottom line. Companies like America Movil (AMX) and Deutsche Telekom (DTEGF.PK) are providing stiff competition due to lower priced and less restrictive contracts. Availability of handsets without contracts, e.g. at Walmart (WMT) stores, is also expected to make things difficult. Further, there is also an increasing demand for used phones which is making topline growth a bit more difficult. Usell (USEL), which provides a platform for buying / selling used phones, reported excellent growth in revenues in the first half of 2013. The competition is forcing some strategic consolidation, but the margins are likely to remain under pressure. As mentioned in the article, Telefonica's value is currently clouded by uncertainty about the forward dividend, high leverage ratios and integration issues. The stock may do better as the company delivers on these fronts. On the other hand, analysts at Zacks mention that the effects of reduction in mobile termination rates, increased commercial expenses, heavy network investments and a highly leveraged balance sheet could damage the company’s prospects.