Telefónica plots push into cyber and knowledge centres to clear means for offers

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Telefónica is ready to spend money on knowledge centres and cyber safety companies in a bid to persuade European regulators to approve telecoms mergers, because the Spanish firm goals to guide consolidation on the continent.

The Madrid-based group is hoping {that a} pledge to make particular investments in key digital infrastructure will assist persuade the European Fee that fewer, bigger telecoms operators can increase the bloc’s technological resilience, in accordance with an individual accustomed to the matter.

Telefónica chair Marc Murtra has made European consolidation his high precedence since being parachuted into the enterprise this yr by shareholders together with the Spanish authorities.

The corporate, which operates in Spain, Germany and owns 50 per cent of UK operator Virgin Media O2, is one in every of a number of European telecoms teams pushing Brussels to permit 4 participant markets to be diminished to a few operators. 

This consolidation has just lately been permitted within the UK, the place regulators authorized Vodafone’s £16.5 billion merger with Three in December.

Telefónica is within the early phases of considering a transfer to amass the 50 per cent of Virgin Media O2 it doesn’t already personal from joint shareholder Liberty International, in accordance with three individuals accustomed to the matter. The enterprise has beforehand been valued at £31.4 billion. Telefónica declined to touch upon its plans.

The EU is grappling with easy methods to arrest its relative financial decline, presenting a possibility for firms to push for extra lenient competitors regulation.

Murtra mentioned in March that Europe’s place on the planet would “proceed to dwindle” ought to Brussels not heed requires change.

In his report final yr on the way forward for European competitiveness Mario Draghi advisable the bloc facilitate telecoms consolidation to create stronger gamers with a higher incentive to spend money on bettering connectivity.

The previous president of the European Central Financial institution desires Brussels to outline the telecoms market on the European degree, quite than the member state degree because it at the moment does.

Europe has 41 telecom operators with greater than 500,000 clients, in accordance with commerce physique Join Europe. In contrast, the US has solely 5 cell operators with half one million clients or extra, whereas China and Japan have 4 every.

The Trump administration’s hostility in direction of Europe has pushed the difficulty of cyber safety up the agenda. On Tuesday, the top of the bloc’s cyber company warned the EU was depending on the US for cyber safety, and should “step up” to assist companies sort out cyber threats.

An individual accustomed to Telefónica’s pondering mentioned the corporate is ready to spend money on cyber safety companies to offer European firms a neighborhood different to US and Israeli suppliers, which dominate the business.

Enisa, the EU’s cyber safety company, has warned that there was a rise in state-sponsored cyber assaults, backed by China and Russia.

Telefónica, which at the moment operates 15 knowledge centres, is contemplating the brand new investments alongside its strategic assessment, which is anticipated to conclude within the autumn.

Extra reporting by Barbara Moens and Laura Dubois in Brussels