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Video services

Telefonica Restructures, Creates New Units

Telefónica SA (NYSE: TEF) has introduced a new corporate structure that integrates its struggling domestic business into its pan-European division and sees the creation of a new business unit designed to exploit new data services opportunities and the creation of a new operating unit charged with maximizing the operator's global potential. (See Telefonica Reorganizes.)

The new business unit is Telefónica Digital, which will be headquartered in London and headed up by Matthew Key, most recently the head of Telefónica Europe. The unit will have 2,500 staff in a number of locations (Madrid, Sao Paulo, Silicon Valley and various hubs in Asia/Pacific) and will, according to the company's official statement, be "responsible for developing and globally exploiting businesses like, among others, video and entertainment, e-advertising, e-health, financial services, cloud and M2M. It will aim its activity both at the corporate and residential segments."

That unit will help the two new geographic units, Europe and Latin America. The big change here is that Spain, until now a standalone business, is now part of the European division that is led by José María Álvarez-Pallete, who has been leading the Latin American business.

Santiago Fernández Valbuena, previously general manager of Strategy, Finance and Corporate Development, is now in charge of Latin America.

The new operating unit is Global Resources, created to "ensure the profitability and sustainability of the business by leveraging and unlocking economies of scale, as well as driving Telefónica's transformation into a fully global company." Its chief task is to "generate the maximum amount of synergies from the global management of the Technology, IT Systems, Procurement, Support Services and Human Resources areas." It is headed by Guillermo Ansaldo, until now the head of Telefónica Spain.

One example of how the carrier is already utilizing its international resources came last week when Telefónica Czech Republic and Telefónica Germany announced plans to share their network monitoring capabilities. (See Telefonica Units Share Their SPIT.)

The moves come as the Spanish giant, which has more than 295 million customers globally, prepares to take a massive financial hit as a result of job cuts in Spain, where its business has been in decline due to poor macroeconomic conditions. (See Telefonica Takes $3.8B Hit and Telefonica Reports H1.)

— Ray Le Maistre, International Managing Editor, Light Reading

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