O2 owner Telefonica will create a new hub in London as it shifts the focus of its business away from stricken Spain.
The creation of a new digital business will spark an inflow of jobs into the capital as the telecoms giant scrabbles to lessen its exposure to the Spanish economy and give greater weight to its UK business.
The former Spanish state telecoms provider will keep its headquarters in Spain, where it has its primary listing. Telefonica Spain, currently one of the company’s three main hubs, will be subsumed into its European division, creating a €34bn (£30bn) revenue business with 105m customers.
The new digital arm will take equal billing with the European and Latin American businesses. It will be headed up by Matthew Keys, credited as the man who brought the iPhone to Europe.
The digital business, described as “the future of the company,” will encompass areas including machine to machine payments, internet calling and digital advertising. City A.M. understands that some of the new branch’s 2,500 employees will be based in the UK.
In a shake-up of the firm’s senior management, current Latin America boss José María Álvarez-Pallete will take over Telefonica Europe. Chief financial officer Santiago Fernández Valbuena will take responsibility of the rapidly growing Latin American business.
Telefonica’s £18bn takeover of O2 in 2005 remains the UK’s largest takeover by a foreign company, dwarfing Kraft’s £11.9bn takeover of Cadbury last year.