Telefónica, Spain’s dominant telecoms firm, has two problems. One is that the Spanish economy is in a mess; the other is that most of its business is old-fashioned fixed-line telephony. It moved away from that generally shrinking business in 2005 when it bought the O2 network, formerly known as BT Cellnet, based in Slough. Now it is moving deeper into Britain. Telefónica is forming a new digital-services division, with a 300-strong headquarters in London and offices around the world in places like Silicon Valley, São Paulo, Tel Aviv and Madrid. The firm recently found office premises in Regent Street in the heart of the West End, and expects that staff will move in by summer.

Inward investment into Britain usually consists of the opening of new factories (think Japanese carmakers, led by Nissan) or, more often these days, the takeover of famous British names like Cadbury by foreigners, accompanied by gnashing of teeth about pillars of native business falling. So for a country hungry for high-tech start-ups it is gratifying to see foreigners creating one in Britain.

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www.economist.com/node/21542405