MADRID, Spain-Spain’s Telefonica plans to spin off its mobile-phone business before the fall, published reports indicate.
Analysts value the unit at as much as $71.3 billion. Telefonica reported about 9 million wireless subscribers in Spain and 10.5 million in Latin America at the end of 1999. Analysts say the mobile-phone unit contributes to the majority of Telefonica’s growth and is equivalent to about half of the company’s value.
The Spanish government last month awarded Telefonica one of four Universal Mobile Telecommunications System licenses. In late March, Telefonica announced it reached an agreement with several Spanish companies to form a consortium that would offer UMTS service in several European countries beginning in 2002.
The consortium is bidding for one of five third-generation licenses currently up for auction in the United Kingdom. Total bids have reached more than $20 billion to date. Telefonica said it intends to obtain UMTS licenses in the majority of European countries, including the United Kingdom, Germany, Italy and France. In parallel with its participation in the license-bidding process, the Spanish operator also is holding talks with international groups to create a pan-European consortium that would hold equity stakes in the different national companies providing the UMTS services in each country.
