Vodafone Share News (VOD)

MADRID, Sept 23 (Reuters) - A record number of mobile phoneusers in Spain switched service providers in July, hitting bigoperators such as Telefonica as the recession spurredcustomers into looking for cheaper deals, according to newfigures published on Monday.

Telefonica and Vodafone lost out to smallercompetitors Orange, Yoigo and virtualoperators, which rent and sell on network capacity fromestablished operators.

In July, 638,948 clients switched operator, up almost 50percent on the same month in 2012, helping Orange, Yoigo andvirtual operators catch up with the bigger players, according tothe industry regulator, the CMT.

Operators are slashing prices and offering bundled packagesincluding mobile, fixed line, internet and television servicesto attract new clients at a time when consumer confidence isvery low, with one in four of Spain's workforce unemployed andretail sales falling month-on-month for over three years.

Orange now has 22.8 percent of the mobile market, comparedwith 20.9 percent in July 2012, while Yoigo's market shareincreased to 6.6 percent from 5.8 percent. Virtual operatorsgrew their market share to 11.1 percent in July from 7.8 percenta year before.

Telefonica's market share fell to 34.4 percent in July from37.6 percent a year earlier, while Vodafone's slice of themarket shrank to 25.2 percent from 27.9 percent.

"Strong competition between mobile operators boosted thefigures for switching and new connections," the CMT said in astatement.

Despite attracting some new clients, Telefonica lost 119,014connections overall, while Vodafone, the second-biggestoperator, recorded a net loss of 68,512 lines. Virtual operatorsled gains, with a balance of 152,869 new customers.

The number of mobile lines in Spain rose by 169,856 in July,the third consecutive month of increases following months ofdecline. However, the total number of connections, at 52.2million, was 4.5 percent fewer than a year earlier.