Telefonica reportedly revealed plans to shut its technology brand Tuenti in Spain next month, as it struggled to compete with larger rivals and attract new customers.

El Economista reported Telefonica informed a workers’ union it intended to close the division, although the impact on staff will be limited as they will they will likely be transferred to its O2 brand.

Officially, Tuenti services on its app including VozDigital calling and SMS will cease on 29 May and customers will migrate to O2.

Telefonica acquired Tuenti in 2010 for around €70 million as it sought to jump on a social media boom and develop a service targeted at a younger audience.

It was popular in its early years, registering more than 15 million users up to 2012 and was known as the Spanish Facebook. It then evolved into a VoIP and messaging platform.

Sources told the newspaper Telefonica had recently realised Tuenti was no longer able to offer a different service which adds value to customers and there were other applications including WhatsApp which offered similar services for free.

Telefonica indicated it plans to shut down Tuenti to commit 100 per cent of the resources to other services it considers more valuable to customers, El Economista added.