Telefonica Cuts Cellular Rates In Spain By 9.5%

MADRID -(Dow Jones)- Telefonica reduced its mobile phone rates in Spain an average of 9.5% Friday in a move to increase its customer base and the number of calls its subscribers make, a company spokesman said Friday.

In a press release, the world's largest telecommunications company in Spain and Latin America also said it has reduced its cellular tariff plans from 10 to 4 in a move to streamline operations.

Telefonica said its mobile operator Movistar would reduce its rates as much as 62% compared to the old rates and the new plan would be up to 40% less than its competitors tariffs.

Telefonica's Movistar is Spain's top mobile operator with 22 million subscribers at the end of 2006, followed by local subsidiaries of Vodafone and France Telecom with 14.6 million and 11.1 million respectively.

Newcomer Yoigo, a unit of Sweden's Teliasonera, has more than 100,000 customers.

Telefonica said Wednesday upstarts like Yoigo and other Mobile Virtual Network Operator's launched recently in Spain haven't affected the company's mobile revenue.

However, the new operators have shaken up the market with lower flat rates and simple price plans.

Mobile phone rates in Spain are among the highest in Europe.

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

-By Jason Sinclair, Dow Jones Newswires, 34 913958127, jason.sinclair@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 18th May 2007