The European Investment Bank will support Telefonica's investments in R&D activities in the information society sector in Spain by providing EUR 400 million.

The R&D activities will focus on applications for processes, products and technologies of fixed and mobile telecom networks and services. Investments will be located in research centres in Madrid, Barcelona, Valladolid, Granada and Huesca. Telefonica I+D, a subsidiary company incorporated in 1988, will implement them.

The EIB's policy is to provide additional support for research and development and innovation projects. In the effort to accelerate R&D investments to meet the Lisbon Agenda targets, corporations may benefit throughout the European Union. The long-term loan represents a major part of the financing of the R&D programme, the remaining part being financed by bank borrowings, own funds and grants.

Some 20% of total investment is to be carried out in assisted areas that are affected by change in the economic activity. Their regional development policy is aimed at developing leading edge service sectors such as R&D activities in conjunction with local educational and research institutes.

The project will contribute to developing innovative ICT infrastructure, hardware and software applications, as well as to facilitating improved internet, multimedia and telecom services. In addition, it will contribute to the development of Europe's information infrastructure (including e-Government) and support European competitiveness in the IT/Internet/telecom sector, with beneficial impacts on technological developments and job creation.

Telefonica is the most important private R&D company in Spain and a leading participant in European research projects. It took part in the IST, NEM and NESSI programmes of the 6th European Framework Programme and actively cooperates with universities as well as with fundamental research centres, e.g. through sponsorship of courses, student thesis and e-learning rooms.

Telefónica is one of the largest telecommunications companies in the world in terms of market capitalisation. Its activities are centered mainly on the fixed and mobile telephony businesses with broadband as the key tool for the development of both.

The company has a significant presence in 23 countries and a customer base that amounts more than 195 million accesses around the world. Telefonica has a strong presence in Spain, Europe and Latin America, where the company focuses an important part of its growth strategy.