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Telefonica Joins Hands with Samsung

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Telefonica Digital of Telefonica S.A. (TEF - Free Report) has announced its collaboration with Samsung Electronics Co., Ltd. under a global agreement. Under this agreement, Samsung phone users will be able to buy application and mobile content from the Samsung app store by accessing Telefonica’s billing platform – BlueVia API Platform.

This new arrangement will help customers avoid using credit card payments while purchasing from the Samsung app store as it will transfer payments to their phone bill or prepaid credit.  

For Telefonica, Samsung will remain the first original equipment manufacturer (OEM) to take direct access to Telefonica’s billing capabilities under a global agreement.

Telefonica is progressing well to grasp the opportunities in the digital world through several growth strategies. Recently, on May 9, the company also struck a deal with Dell Inc. to offer mobile connectivity solutions for its Windows 7 and Windows 8-based devices throughout Europe by means of the Dell NetReady solution.

Further, the company will be launching its first line of devices based on Firefox operating system in Brazil, Colombia, Spain and Venezuela in mid-2013 with further launches in Europe and Latin America through 2014. Manufactured by Alcatel One Touch, LG and ZTE with Qualcomm’s (QCOM - Free Report) Snapdragon processor, these devices are expected to provide customers a satisfactory data service at affordable prices.

However, Telefonica is facing intense competition from the likes of  France Telecom’s Orange mobile brand and Vodafone Group Plc. (VOD - Free Report) . In order to safeguard its position in the European region, the company is continuously upgrading its 3G mobile broadband networks –– High Speed Packet Access Plus (HSPA+) and Dual Cell HSPA. The company is further working to deploy LTE services in urban areas and also taking initiatives to adopt new technologies like Voice over LTE (VoLTE) to drive its top line.

The company has undertaken several efforts to enhance efficiency across European markets such as removal of handset subsidies in Spain, gradual reduction of subsidies in the U.K., network sharing agreement in the U.K. and Mexico and a redundancy program in Spain. Such initiatives would lead to further savings and boost profits in the coming years.

Telefonica S.A. currently has a Zacks Rank #3 (Hold).

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