* Telefonica to get access to 4G frequencies
* Yoigo to get access to broadband assets
* Orange Spain urges authorities to look into the deal
By Clare Kane
MADRID, Aug 1 (Reuters) - Spain's biggest telecoms operatorTelefonica signed a deal with No. 4 provider Yoigo on Thursday allowing it to use its rival's superfastmobile Internet frequencies in exchange for access to itsbroadband assets.
Telefonica, the only operator in Spain that does notcurrently provide 4G services, will have full use of Yoigo'ssuperfast spectrum, while the smaller player will now be able tocompete in the attractive market of bundling fixed-line andmobile telephone services.
The agreement is expected to come into force in the fourthquarter of the year and also includes the extension of contractsthat grant Yoigo access to Telefonica's 2G and 3G networks inareas of the country where it does not have coverage until 2016,according to statements from the companies.
However, the deal drew fire from the country's No. 3operator, Orange Spain, which asked competition andgovernment authorities to look into the tie-up. Spain's telecomsregulator could not immediately be reached for comment.
Telefonica and Yoigo said they had also sold mobile towersto infrastructure firm Abertis for 385 million euros($511 million). Abertis said the deal would contribute 60million euros to its earnings before interest, taxes,depreciation and amortisation (EBITDA).
SHAKE-UP
Telefonica could not launch 4G as it did not have the rightfrequencies available due to a number of television channelsthat were using them. The company said it intends to build itsown 4G network when possible.
Spain has started a process to reverse the awarding oflicences for those channels.
Yoigo, a small player with 6.7 percent of the market, hassuccessfully grown its business as cash-strapped Spaniards turnaway from bigger operators in search of cheap deals.
But the company, a division of Nordic telecom operatorTeliaSonera, has not been able to compete on so-called"quadplay" deals that bundle fixed line, mobile, internet andtelevision services. Telefonica has led the way on quadplay withits Fusion package, a model other operators are using.
In a cut-throat market where over half a million peopleswitched mobile operator in May, operators did not have to fearYoigo poaching customers who wanted all their services in onebill. Now, Yoigo will be in a position to compete with the likesof Orange, Vodafone, Jazztel and ONO.
Orange said the fact Yoigo would have access to Telefonica'sfibre optic Internet services, which offer faster speeds thancompetitors, discriminated against operators that cannot matchthese speeds.
Orange and Vodafone announced in March they would team up tobuild a joint fibre network and last month the pair reached adeal with Telefonica allowing reciprocal access to fibreinstallations in buildings.
Telefonica's O2 brand plans to launch superfast 4G mobile inLondon and two other British cities by the end of August, thecompany said in a separate statement.
Vodafone (VOD)
