Telefónica signals intent to European rivals

Telefónica had won a €350 million contract with Deutsche Post, the German logistics company to supply voice and data networks across 28 European countries, excluding Germany. The contract is designed to yield savings of €150 million over five years.

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, reports the Financial Times .

He was reported saying that Telefónica had the scope to supply multinationals in the UK and Germany since its acquisition of the UK's O2 in 2006.

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

France Telecom and BT who have hitherto been Europe's leading suppliers of managed corporate services should take note. The sector is likely to grow as corporations look to ways of saving money, but it is clear they now have a serious rival.