Telefonica is planning to use the promise of high dividends to attract investors to the planned public offering of its German unit, according to Bloomberg.

The move is designed to offset concerns that O2 Germany is one of the smaller players in the market, which is otherwise dominated by T-Mobile Germany and Vodafone Germany.

The Spain-based group is under pressure to address its debt burden, and has suspended its own dividends in order to bolster its cash pile. However, it still needs to make its German unit an attractive proposition for external investors, with strong dividend payments seen as an effective way to achieve this.

According to reports earlier this month, Telefonica has signed-up bankers to advise on the share sale.

Bloomberg said that Telefonica is highlighting O2 Germany’s potential for revenue and market share growth, as well as noting the more stable economic environment that the country offers when compared to markets such as Spain. Ratings agency Moody’s has previously noted the company’s close ties to the Spanish market, which is the subject of ongoing economic concern.

It is believed that Telefonica will offer around 20 percent of the German business to investors, for a figure in the EUR1 billion to EUR1.5 billion range.

Earlier this year, KPN, owner of E-Plus, Germany’s third-biggest operator, shelved plans to sell this business, stating that “the current adverse conditions in financial markets” had hampered its valuation. At this point, it was also suggested that KPN and Telefonica had held talks over a possible combination of E-Plus and O2.