Telefónica ramps debt-cutting by slashing handset range

Telefónica plans to slash its handset portfolio and the number of associated purchasing teams as part of its effort to reduce debts of €58 billion. In a separate move, the operator announced it would also sell off its online travel agency.

The company said it will merge its two global devices teams, based in Slough, UK, and Madrid, into a single unit run by Marieta Rivero, general manager of devices at Telefónica Global Resources, in Madrid.

This move is part of Telefónica's wider strategy that was announced last year to cut costs by leveraging its global purchasing power, according to Mobile Today.

"We have decided to create one global devices team, giving manufacturers one point of contact," said a Telefónica spokesman. "It was decided that global handset procurement fits better within Telefónica Global Resources than with Telefónica Digital, which is about all things digital." He added: "This is part of an ongoing process to streamline the organisation."

This move will also see the company dramatically reduce its current handset portfolio from around 250 down to nearer 100. "We spend a lot of money on handsets and we want to get the costs down. It's all about making the best of our scale, how we can work as a global company and how we can become a lot more efficient," the spokesman told Mobile Today.

Elsewhere, Telefónica and leisure group Orizonia sold their jointly-held online travel agency Rumbo to Switzerland's Bravofly. The agency was acquired for €74 million, according to Bloomberg.

For more:
- see this Mobile Today article
- see this Bloomberg article

Related Articles:
O2 Germany IPO wins investor support, but price war worries mount
Telefónica CFO: We could split Latin American operations from Europe
O2 Germany, E-Plus may move toward network sharing deal
Report: Telefónica strips €4.3B in cash from O2 Germany ahead of IPO
Telefónica taps Chinese banks for $1.2B credit facility