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The Spanish Ministry of Defence has awarded Telefonica the majority of a tender to provide them with a secure private telecommunications network services
According to Spanish news source Expansión, the company has won three out of four lots of the I3D (Comprehensive Information Infrastructure for Defence) contract for a total of €80.3 million.
The I3D is the new communications and information network for senior government officials and the Armed Forces, hence requiring the highest level of network security. The contract includes the deployment of a dark fibre network and the accompanying physical infrastructure.
Unsurprisingly, more specific details relating to the infrastructure being deployed in this sensitive project were not revealed.
The last remaining I3D contract for €3.3 million was won by Balalink, a subsea cable connecting mainland Spain to the Balearic Islands, from Valencia to Palma.
As the largest telecoms operator in Spain, Telefonica is already deeply intwined with the nation’s Ministry of Defense, having won five related government contracts, worth €170 million, in the last year alone.
However, the company’s privileged position as a trusted government partner has been under scrutiny in recent months. In September last year, Saudi Arabia’s STC Group built a 9.9% stake in the business, prompting the government to take a similar stake in Telefonica last month to mitigate STC’s influence.
The Spanish government acquired a 3% stake in the company via state holding company SEPI, saying they would increase the stake slowly in the next few months to 10%, a move valued at around €2 billion.
The move represents a partial renationalisation of the Telefónica, which has been a fully private company since 1997.
The government explained that the state investment is “in line with other large European countries, such as France and Germany, which have and are increasing their shareholdings in big and strategic telecommunications operators”.
The acquisition remains pending regulatory approval.
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