User reported a bug ( https://bugs.kde.org/show_bug.cgi?id=281392 ) against KDE-Telepathy stating that one contact shows up as 'Sánchez' instead of 'Sánchez'. It happens with Gabble/Jabber (jabber.org). Gabble debug output showed that contact name already garbled, but other clients like Kopete seems to be showing it ok.
Since Telepathy serves as a backend for many clients (although currently only a few) we think that the proper decoding should be handled here, in Gabble.
This happens with telepathy-gabble 0.12.6.
I've also CC'd the original reporter, Albert, so he can provide you with other needed details.