Telefonica merges German business activities, fixed line and mobile divisions

17 Apr 2009

Broadband service provider Telefonica Deutschland and cellco O2 Germany, both owned by Telefonica of Spain, have announced plans to bundle their business-to-business activities, including wholesale operations, and combine their mobile and fixed line operations under the Telefonica O2 Germany banner. According to the press release, the new business division and the consolidation of the two network infrastructures will help the company prepare for future growth and convergent offers: ‘Thanks to the merger of Telefonica Deutschland and O2, we have a strong landline and mobile communications organisation that is able to act and react flexibly to market changes. At the same time, we are securing opportunities for further growth in a convergent world,’ commented Jaime Smith Basterra, CEO at Telefonica O2 Germany.

CEO of Telefonica Deutschland, Johannes Pruchnow, who will become managing director of the new business division, said: ‘The most important basis is our state-of-the-art IP-based landline and wireless infrastructure. Thanks to the new constellation, we will be able to advance with the merger of these two infrastructures even more quickly than before.’ Andrea Folgueiras, CTO at Telefonica O2 Germany, will manage the landline operations in addition to her existing responsibilities.

It is understood that the company is following a strategy pursued by competitors such as Deutsche Telekom (DT) and Vodafone which have set up business customer units to bundle the full range of telecoms services. According to TeleGeography’s GlobalComms database, O2 Germany was the country’s fourth largest wireless network operator by subscribers at the end of 2008, with a customer base of 14.18 million, representing 13.24% market share. Meanwhile, Telefonica Deutschland was the fifth largest broadband service provider by customers in Germany at the same date, with a total of 1.34 million subscribers, corresponding to a market share of 6%.