Telefonica considers a takeover of its german subsidiary o2

In view of the high debt burden, the group is also considering listing its well-performing business in latin america on the stock exchange, the group announced on wednesday in madrid after a meeting of the board of directors.

Details of the timetable and details of the rough order were not disclosed, however. At the german subsidiary telefonica germany no comment could be received on wednesday evening at first. If it comes to the parquet floor, it would probably be one of the biggest stock market failures in germany for many months.

Telefonica sits on a mountain of debt of around 57 billion euros and is clearly suffering from the economic crisis in its important home market. In contrast, business is much better at the german mobile communications subsidiary. Like its rivals such as e-plus, o2 is benefiting in germany from the continuing trend towards smartphones and mobile internet. Between january and march, the number of mobile customers increased by 7.1 percent to about 18.6 million.

Telefonica germans also achieved significant growth in revenue and adjusted operating profit. In 2011, o2 had generated sales of around more than 5 billion euros. After the market leaders deutsche telekom and vodafone, o2 ranks fourth in the fiercely competitive german mobile communications market, behind the competition from E-plus, but also offers fixed-network and internet connections.

The figures for the spanish mother are far less encouraging. The group is particularly hard hit in spain: in view of high unemployment, many spaniards are migrating to cheap suppliers. In addition, the company took a new step in which new customers no longer receive a subsidy when they buy a smartphone. Moreover, the debts print on the balance sheet, also because the interest rates for loans have risen significantly in the wake of the crisis. In the first quarter, operating profit before depreciation fell by almost 9 percent to 5.08 billion euros.

The domestic business still contributed one-third of the operating profit – at the competitor deutsche telekom it is more than half. More than half of the lowen share now comes from the latin american business, which may also be brought to the stock exchange. In europe, telefonica also has a strong presence in the czech republic and great britain.