Telefonica drives innovation through partnerships

Speaking at an event in London on Thursday, Matthew Key, head of Telefónica Digital since its inception nine months ago, said his unit expects to drive annual revenues of approximately €5bn by 2015 with an annual revenue growth rate of 20 per cent.

The division was created to target new opportunities within services sitting beyond the traditional network connectivity offered by operators, and will take an active role in the development of these initiatives, rather than that of financial investor only.

Key said the main focus of the company will broadly cover three sectors: mhealth; cloud services; and M2M, but individual initiatives stretch much further afield.

On Thursday the carrier unveiled a wide ranging agreement with UAE-based Etisalat whereby the two companies will jointly develop business opportunities in M2M, financial services, cloud computing, eHealth, mobile advertising and OTT communications, including the acquisition of video content, while Etisalat will also participate in Telefónica’s global device procurement process.

Another program saw Telefónica secure a global framework agreements with Facebook, Google, Microsoft and Research In Motion to offer carrier bill payments as a means of driving the monetisation of mobile content, particularly in Latin America where credit card penetration is low and 60 per cent of the population do not have bank accounts.

Direct to Bill in Europe is already proving popular with customers. In Germany, 400,000 customers per month on average are now making payments for a variety of products and services across different platforms. Telefónica plans to have the capability live in 14 markets globally by year end.

A lot of the initiatives focus on Latin America and in Brazil the firm is making a multi million Euros investment to kick start the mobile advertising market, using its UK O2 Media model as a blueprint. The investment will see a local team put in place to accelerate the deployment of platforms and capabilities in a rapidly expanding overall ad market, currently worth €15bn, where mobile advertising is growing faster than Western Europe.