Telefonica is to use femtocells provided by Alcatel-Lucent in a bid to improve its mobile voice and broadband internet services throughout Europe and South America, it has been announced.

Telefonica has signed the deal with Alcatel-Lucent because it expects demand for its 3G networks to increase significantly in the years to come, as the two continents adopt mobile video on a much wider scale.

Alcatel-Lucent research suggests that most mobile video usage will take place indoors, which has convinced Telefonica to opt for its 3G femtocells.

They are designed to work by boosting capacity in remote indoor locations in a cheap and energy efficient manner, while also relieving traffic on the firm's macro network.

Federico Guillen, president of Alcatel-Lucent Spain and global account manager for Telefonica, said: "Alcatel-Lucent's innovative femtocell portfolio helps service providers relieve stress on their cellular networks while allowing them to meet the growing demands for mobile data.

"Using our industry leading femto and metro cell portfolio, operators can deliver an enhanced quality of experience to subscribers and help them stay connected, wherever they are."