Wants to show that it will invest in key infrastructure assets
Telefónica could invest in data centers and cyber security services to sweeten European regulators' chance of approving telecom mergers.
The Spanish telco has made no secret of its desire for the European market to consolidate.
Marc Murtra, the carrier's chair said as much back in April, as the telco started its strategic review.
He’s one of many European telco CEOs putting pressure on the European Union to be more open to telecoms consolidation, for example, reducing the number of carriers from four to three.
Consolidation has already taken place in the UK, following Vodafone’s £15 billion ($20.32bn) merger with Three, taking the total number of MNOs down to three.
The Financial Times reported that Telefónica hopes to convince regulators that if it invests in crucial digital infrastructure, it will be more likely to push through consolidation.
At present, the carrier owns 15 data centers, and is considering investing in more, states the FT. An idea of these investments may be known later this year, when the company is expected to conclude its strategic review.
If so, it would represent a change of heart from the telco, which, along with Asterion, has explored a sale of its Latin America data center firm Nabiax. In November, Keppel-linked European asset management company Aermont announced it would acquire Spanish data center operator Nabiax.
On top of the planned data center investment, a move to bolster cyber security services investments is also being considered by the Spanish telco, largely due to the Trump administration’s hostility towards Europe.
The FT noted that Telefónica is prepared to invest in cyber security services to give European companies a local alternative to US and Israeli providers.
Telefónica operates in its home market, Spain, and has held a sizeable chunk of the telecoms market in the UK with Virgin Media O2, and in Germany with O2 Deutschland.
The carrier has pushed to slim down its operations in Latin America. Last month, Telefónica struck a $440 million deal to sell its Uruguayan unit to Millicom.
A month before this, Telefónica sold its Peruvian unit for less than $1 million to Integra TecInternational Inc (Integra Tec), taking a huge hit on the $2bn the company spent to acquire the company back in 1994. Last month, Spanish publication El Confidencial reported that Telefónica had hired Citi as an adviser to sell its Chilean business unit.
In February, Telefónica struck a deal to sell its Argentinian unit to Telecom Argentina for $1.2bn, while it has also stepped up plans to sell its Mexican unit.
