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* Telefonica to cut 1,600 of total 9,100 jobs
* Job cuts come after 8.6 bln euro merger with E-Plus
* Telefonica targets 5 bln euros in synergies from deal (Adds confirmation, comment, background)
FRANKFURT, Oct 17 (Reuters) - German telecoms operatorTelefonica Deutschland said it would cut 18 percent offull-time jobs to help to achieve cost savings from its takeoverof rival E-Plus.
Confirming an earlier report by Reuters TelefonicaDeutschland said on Friday it planned to scrap 1,600 jobs out ofa total of 9,100 by 2018.
"The planned measures shall contribute to achieving theannounced synergies of more than 5 billion euros," TelefonicaDeutschland, which is controlled by Spain's Telefonica said in a statement.
Telefonica Deutschland bought E-Plus, the German business ofDutch peer KPN, for 8.6 billion euros ($11 billion) tocreate Germany's largest telecoms operator in terms ofcustomers. Its aim is to get more clout in a battle withVodafone and Deutsche Telekom's T-Mobile.
Facing demands to invest in faster networks, Europeantelecom groups say they need to get bigger to cope after fiveyears of revenue declines.
They say that the region's fragmented market - which hasmore than 100 fixed and mobile groups compared with a half dozenin the United States - leads to price wars and poorer-qualityservice for consumers.
The merger between Germany's third and fourth telecomsoperators was cleared by the European Commission in July afterTelefonica Deutschland had promised to make parts of its networkavailable to mobile virtual operators.
But consumer organisations have been sceptical about how theGerman market, where mobile prices are amongst the highest inEurope, will be affected by the reduction from four to threecarriers.
A similar deal in smaller market Austria last year did leadto price rises despite the buyer Hutchison agreeing tohost virtual operators on its network.
($1 = 0.7809 euro) (Reporting by Peter Maushagen and Harro ten Wolde. Editing byJane Merriman)
