T-Mobile Near MVNO Deal With Telefonica - Source

MADRID -(Dow Jones)- Deutsche Telekom is close to reaching a deal with Telefonica to become a mobile virtual network operator, or MVNO, in Spain, a person close to the situation said Tuesday.

Deutsche Telekom's mobile division is T-Mobile.

Confirming an earlier report in Spanish daily Expansion, the person said that DT has met with all three mobile operators in Spain - including Vodafone Group and France Telecom - but negotiations are at an advanced stage only in the case of Telefonica.

Expansion added that a deal could be reached in coming weeks.

An MVNO leases all, or most, of its capacity from other operators and then sells it on to customers, saving the cost of building and maintaining a network.

A spokesman for Telefonica said that the company is in talk with several parties interested in MVNO launches, but declined to confirm whether DT is one of them.

Telefonica is the largest telecommunications operator in Spain, by number of customers. DT, Germany's leading operator, already has fixed-line operations in Spain, where it provides voice and Internet access services through its local unit Ya.com.

Several companies, including Spanish regional operator Euskaltel, UK's The Phone House, Sweden's Tele 2 and Madrid-based Jazztel have already confirmed plans to launch MVNO over the next few months.

Company Web site: http://www.telefonica.es

-By David Roman, Dow Jones Newswires, 34 913958125, david.roman@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 12th September 2006