Telefonica confirmed today that it will list its German mobile unit during the current quarter, promising that the IPO would net investors a EUR500 million dividend next year.

Although the Spanish-based group did not say how much of O2 Germany it planned to float, sources at Reuters said the firm was looking at listing between 10 and 20 percent of the business. It is thought that the IPO could happen as early as this month.

The group announced in May that it was mulling plans for IPOs in both Germany and in Latin America in an apparent move to raise cash to pay-down its large debts and guard against the deepening Eurozone crisis. It reportedly signed up several investment banks to help with the German listing last month.

O2 Germany is Telefonica’s second-largest European unit (behind Spain) and is valued at about EUR8 billion.

Although it is the country’s smallest operator, behind Deutsche Telekom, Vodafone and KPN's E-Plus, the unit is deemed an attractive prospect to potential investors.

"We are operating in one of Europe's strongest economies and one of the biggest telecoms markets on the continent," Rene Schuster, CEO of Telefonica Germany.