TDE.L Regulatory News (TDE)

21 Jan 2009 09:22

Telefónica O2 opens a new European communication center in Prague for DHL

January 21, 2009

Telefónica, the third-largest telecommunications operator in the world, won a tender for providing a complete portfolio of services for DHL throughout Europe. Deutsche Post World Net, which owns the DHL brand and is the largest global provider of express and logistics services, decided on the winner of the contract, worth 350 million Euros. Telefónica will manage its communications services across 28 European countries over the next five years from Prague. Telefónica will become Deutsche Post World Net's primary fixed and mobile telecommunications provider in Europe and is expected to help the logistics group save over 150 million Euros in costs over the period.

Telefónica will provide secure telecommunications services for 125,000 employees and 2,400 sites in Europe, and will transform Deutsche Post World Net's Internet Protocol (IP) network services. The service will be delivered by Telefónica in Spain, its O2 businesses in the UK, Ireland, the Czech Republic, and Slovakia, as well as new operations and partnerships in 23 other Western European countries. The European service will be managed by a dedicated 24x7 Service Management Centre in Prague and is expected to go live in early summer 2009, subject to the usual approval by the cartel authorities and the completion of the transaction.

""The Service Management Centre together with the central DHL IT Service Desk in Prague materialize the customer's vision of centralized management of European ICT services. Telefónica O2 is proud of being able to help its client to make his vision come true,"  said Vice-President for Corporate Customers Fernando Astiaso, who was the project guarantor on the Czech side.

During the tender, the operator competed against very experienced rivals. The concluding meeting and final phase of the tender took place in Chodov, Prague, where DHL headquarters are situated. Telefónica was selected for its potential, accommodating approach, and flexibility. Another important factor was its ability to manage the entire project from one location, and its complete implementation in accordance with ITIL standards. The fact that DHL has also had an excellent experience with the services of the Czech branch of O2, which is the only converged operator and provider of ICT services on the market, tipped the scales in the operator's favor considerably.

In the process of switching services in the coming days, DHL branches throughout Europe will cancel their contracts with local providers and the Telefónica group will take over all obligations. In countries where the operator is not represented, new branches will be established and services will be provided with partners. For the Czech market it is important that the entire project will be managed from Prague, where a new European administration center is being established. In a period of economic recession, the operator is thus creating over one hundred jobs, which it has already begun to fill. A large space is also opening up for other Czech providers and consultancy firms because the operator will tailor and adjust all information systems and processes for DHL, and will outsource some of these services. The entire group will then adopt systems created in the Czech Republic (for example, global billing).

Telefónica will reinforce and extend its global IP backbone in Europe to provide services in 28 countries, including wide area network connectivity, centralized Internet access, local area network (LAN) services such as wireless LAN, fixed voice, mobile voice and data, and IT services such as managed security, web conferencing, unified messaging, and fixed mobile convergence. The contract comprises more than 100,000 LAN Ports, more than 60,000 fixed voice devices, and 80,000 mobile connections, including 24,000 mobile and smartphone devices. 

The agreement includes a commitment to continuous innovation in addition to strict service level agreements in order to assure further optimization and cost savings over the lifetime of the contract. There are no job cuts planned at Deutsche Post World Net as part of the telecommunications streamlining.

Deutsche Post World Net has been seeking to reduce costs and derive more value from its businesses as part of its Roadmap to Value capital markets program. The Group is also seeking to optimize its telecommunications services in the United States, Latin America, Asia-Pacific, and emerging markets; this activity is expected to lead to additional cost savings in 2009. As previously announced, the Group aims to cut 1 billion Euros in costs by the end of 2010.

With a total contract value of nearly 350 million Euros, this agreement is Telefónica's largest pan-European combined fixed and mobile contract, and will span Deutsche Post World Net's Freight / Global Forwarding, Supply Chain / Corporate Information Solutions, Express, Global Mail, and Global Business Services business divisions in 28 European countries, excluding Germany.

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About Telefónica O2 Czech Republic 

Telefónica O2 Czech Republic is a major integrated operator in the Czech Republic. It is now operating more than seven million lines, both fixed and mobile, making it one of the world's leading providers of fully converged services. The organization offers the most comprehensive portfolio of voice and data services in this country. It is paying special attention to the exploitation of the growth potential, particularly in the data and Internet sector. Telefónica O2 Czech Republic operates the largest fixed and mobile network including a 3rd generation network, CDMA (for data), and UMTS, enabling voice, data and video transmission. Telefónica O2 Czech Republic is also a notable provider of ICT services.

About Telefónica Europe

Telefónica Europe is a business division of Telefónica comprising mobile, fixed, and DSL operations in the UK, Ireland, the Isle of Man, Germany, the Czech Republic, and Slovakia. With the exception of Isle of Man, all the operating businesses use 'O2' as their consumer brand. Telefónica Europe also has 50% ownership of the UK and Irish Tesco Mobile and German Tchibo Mobilfunk joint venture businesses. Telefónica Europe is headquartered in Slough, UK, and has 43 million mobile and fixed customers.

About Telefónica

Telefónica is one of the world's largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, while its broadband business is the key growth driver underpinning both. It operates in 24 countries and has a global customer base of 260 million. Telefónica's growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America. Telefónica is a 100% private company, with more than 1.5 million direct shareholders.

Deutsche Post World Net is the world's leading logistics group.

Its integrated Deutsche Post, DHL and Postbank companies offer tailored, customer-focused solutions for the management and transport of goods, information and payments through a global network combined with local expertise. Deutsche Post World Net is also the leading provider of Dialog Marketing services, with a unique portfolio of efficient outsourcing and system solutions for the mail business. The Group generated revenue of more than 63 billion euros in 2007. With some 500,000 employees in more than 220 countries and territories Deutsche Post World Net is one of the biggest employers worldwide.