MADRID, March 25 (Reuters) - French telecoms group Orange has hired Bank of America Merrill Lynch as anadviser on its strategy in Spain, including the possibleacquisition of smaller competitor Jazztel, two sourceswith knowledge of the matter said on Tuesday.
Orange came under increased pressure earlier this month tobeef up its operations in the country following the announcementby Vodafone that it had agreed to buy local cablecompany Ono.
Some analysts believe a recent price war in Spain to retaincash-strapped customers and years of falling company revenuesare laying the ground for market consolidation.
"It's not only about advising Orange over the potentialacquisition of Jazztel, but also over all its options," said oneof the sources, confirming a report on website El Confidencial.
Orange boss Stephane Richard had said on Monday the groupwould likely adjust its operations in some European countries.
"Consolidation in Europe is happening in the mobile sectorbut will also be affected by convergence between fixed andmobile. Orange will take part," Richard told French newspaperLes Echos.
"There are countries in Europe where we operate only inmobile for now and where we will have to move."
Bank of America Merrill Lynch, Orange and Jazztel declinedcomment. (Reporting by Robert Hetz and Sophie Sassard; Writing by JulienToyer; Editing by Paul Day and David Holmes)