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BARCELONA, Nov 13 (Reuters) - A top official at Telefonica
said on Wednesday he would support consolidation in Spain's
fiercely competitive telecommunications market, where takeover
speculation has been rife.
The telecoms market in the euro zone's fourth-largest
economy has become ever-more crowded, squeezing profits and
prompting British peer Vodafone to propose cutting up to
one fifth of its workforce there.
"We would be supportive of consolidation of the Spanish
market if that scenario were to take place," Chief Operating
Officer Angel Vila told the Morgan Stanley European Technology,
Media and Telecoms conference in Barcelona.
"We have seen rumours in the press about other players,"
Vila said, after a report last month that domestic challenger
MasMovil planned to buy Vodafone's Spanish business. Both
companies denied that report.
Already spoiled for choice with four national operators,
Spaniards will soon be offered a fifth when regional operator
Euskaltel realises a plan to sell services under the Virgin
brand.
Vodafone Chief Executive Nick Read told the conference its
restructuring in Spain had been painful but effective and
offered advice on operating in that market to Telefonica and
Orange, Europe's No.3 provider.
"They have to be rational, they have to find growth. In the
mid to high end pricing needs to move up," Read said, adding
that Vodafone had already taken those steps.
Telefonica posted 0.1% growth in organic core earnings in
Spain in the third quarter, compared with a 1.6% drop in the
previous three months.
"The trends are very supportive and we are confident we can
continue to achieve the best margins" on core earnings and
operating cash flow, Vila said.
Looking to Brazil, where Telefonica makes about a quarter of
its core profit, Vila said cash-strapped carrier Oi
had started a process to sell its mobile business and Telefonica
would look at that.
"This could be an interesting situation where there could be
synergies," Vila said.
(Reporting by Isla Binnie; Additional reporting by Paul Sandle;
Editing by Edmund Blair)
