Telefónica wins Deutsche Post contract

Telefónica is making an aggressive grab for business in Europe’s corporate telecoms market, in a move that will put pressure on both British and French flagship groups BT and France Telecom.

The Spanish telecoms group said on Wednesday that it had won a €350m ($479m) contract with Deutsche Post, the German logistics company.

Telefónica will supply Deutsche Post with networks that provide telephone and data services across 28 European countries, excluding Germany, and the five-year contract is supposed to help the German company achieve savings of €150m.

The contract highlights how Telefónica is seeking to move into Europe’s market to supply multinational companies with voice and data services.

Multinationals can cut their costs by outsourcing their telecoms needs.

BT and France Telecom are the leading providers of managed phone and data services in Europe, followed by Deutsche Telekom.

Matthew Key, head of Telefónica O2 Europe, Telefónica’s UK-based subsidiary, is to lead the Spanish’s company’s efforts to secure more corporate telecoms business.

He said that Telefónica, following its acquisition of the UK’s O2 in 2006, had the capability to supply multinationals in the UK and Germany.

“We looked at our capability and other companies’ capabilities and we felt pretty well positioned to be able to more aggressively go after the multinational company market than Telefónica has before, or O2 has before,” he said.

Mr Key expressed confidence that Telefónica could win business at rivals’ expense, although the Spanish group has previously been weak in much of Europe’s corporate telecoms market.

He said Telefónica generated €2bn of revenue from corporate telecoms in 2008, with most sales coming from Spain and Latin America, where the Spanish group is a leading operator.

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