Facing stagnant revenues in Spain as well as throughout Europe, Telefonica—Europe’s second-largest telecom service provider by market value—announced a restructuring plan on Monday that calls for (1) the establishment of a new digital division that would take advantage of new opportunities online, and (2) the absorption of Telefonica’s underperforming domestic Spanish unit by the company’s European operations. In recent years, Telefonica, like many fixed-line carriers, has been challenged by difficulties affecting the global economy as well as by the migration of its wireline phone service customers to wireless and Internet-based platforms. Although Telefonica reported a healthy 12% boost in revenues for its fast-growing Latin American operations during the second quarter, revenues in Spain dropped by 6.6% as revenues for the rest of Europe fell by 3.5% during that period. To “take full advantage of the opportunities that the digital world offers with regards to new products, services and the value chain,” Telefonica said it would create a new division, known as Telefonica Digital. That division would encompass the company’s Internet portal Terra, IP-telephony provider Jajah, Tuenti, a popular Spanish social networking site, and other online businesses owned and operated by Telefonica. In turn, the company’s domestic unit, Telefonica Espana, will be rolled into Telefonica Europe. Officials also confirmed that the company will create a new “global resources” unit to be headed by Guillermo Ansaldo, the former chief of Telefonica Espana. The new unit will attempt to “unlock economies of scale” that would enable Telefonica to realize its global ambitions