Spanish telecom giant
Telefonica S. A.
) plans to double its revenue from the Telefonica Digital division
by 2015 through various strategic developments. The unit includes
Spain's popular social networking site Tuenti, Internet telephony
provider Jajah, Internet portal Terra and other businesses such as
giffgaff. The strategies include:
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: The company will offer direct-to-bill payments for goods and
services, particularly in Latin America, in collaboration with
Research In Motion Ltd.
). This alliance would be fruitful for Telefonica, as credit card
penetration in Latin America is low and 60% of the population does
not have a bank account.
Additionally, Telefonica's direct-to-bill payments are already
gaining huge traction in Europe and Germany. The company expects to
reach 14 markets globally with the service by the year-end.
: Telefonica Digital entered into a partnership with UAE-based
operator Emirates Telecommunications Corp., or Etisalat. The
agreement will enable companies to jointly expand their business
opportunities in M2M, financial services, cloud computing, eHealth,
mobile advertising and over-the-top communications.
Mobile Advertising in Brazil
: Telefonica will make an investment of multi-million euros to
develop the mobile advertising market in Brazil.
Deployment of Firefox OS
: Telefonica Digital will continue to deploy Mozilla's HTML5
platform (known as Firefox OS) on its mobile handsets, leading to
low cost devices. This platform would boost smartphone penetration
in the developing markets.
All these initiatives would help Telefonica Digital to outperform
in the global digital market with greater opportunity and more
efficiency. The expansions would aid Telefonica Digital to grow its
revenues by 20% to €5 billion by 2015 from the current €2.4
We are maintaining our long-term Neutral rating on Telefonica. But
for the short term (1-3 months), the stock retains a Zacks #5
(Strong Sell) Rank.