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Telefónica to open digital unit in UK

European chief Mathew Key to head Telefónica Digital team, which will develop new mobile applications

Mathew Key, the executive who won the iPhone for Telefónica and currently heads its European markets outside Spain, is to run a specially created unit based in London which will develop new applications and business models for mobile technology.

Key’s Telefónica Digital unit will build businesses around location based advertising, remote health services, mobiles as digital wallets, and SIM cards in machines such as gas meters and traffic lights.

Employing 2,500 staff, the division will run Telefónica’s Skype-style internet telephony service Jajah, the Spanish social network Tuenti and the Latin American internet broadcaster Terra.

Initially based at the company’s UK headquarters in Slough, it will eventually relocate to central London to be near the investment community, and will have research and development facilities in Spain and Latin America and regional offices in Madrid, Silicon Valley and Sao Paulo.

The move is make or break for Key, who is giving up a position in which he manages 30,000 staff serving 57 million customers in the UK, Germany, Ireland, the Czech Republic and Slovakia.

Mobile operators have been exploring new technologies such as Near Field Communications, where phones can be swiped on readers to make small purchases, for years. But few have become ubiquitous, cash generating businesses in Western countries.

In a statement released on Monday, Telefónica said Key’s role would be to “enhance Telefónica’s ability to operate in the digital environment, thereby increasing the company’s growth potential”.

Telefónica has also reorganised geographically into two units. Latin America will continue to stand alone, while Spain is being folded into the European operation. José María Álvarez-Pallete, who currently heads Latin America, will oversee the enlarged European operation.

Guillermo Ansaldo, who previously ran Spain, will head a global resources unit, running HR, group purchasing, IT and technology.

In 2007, Key secured a major coup for Telefónica by winning the right to distribute the first iPhones in a number of markets including the UK, Spain and Ireland. As UK chief executive, he organised the rebranding of the Millennium Dome as the O2.

He was rewarded with the position of European chief executive November 2007 when his predecessor, Peter Erskine, retired from the role. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds