Telefonica Interested In Brazil's Telemig - Source

MADRID -(Dow Jones)- Telefonica is interested in acquiring the Brazilian mobile operator Telemig Celular Participacoes as the company looks to shore up its Brazilian operations, a person close to the situation said Thursday.

"Telefonica has been interested in Telemig for some time and if it is put up for sale, the company will be there to make an offer," the person said.

Telemig Celular is being sold off by its controlling shareholder. Last week, Tele Norte Leste Participacoes (TNE), or Oi, said it was studying an offer for Telemig Cellular.

Telemig Celular operates in the southeastern state of Minas Gerais, a region of Brazil where Telefonica doesn't have a presence. Telemig Celular has 3.4 million clients in the region and had a net revenue of 1.19 billion Brazilian reals ($616 million) last year.

At 1113 GMT Telefonica shares were down 1% to EUR16.37 in an overall negative market.

Brazil is a key market for Telefonica and the company has said it is interested in improving its foothold in the country.

Telefonica is currently in talks with Portugal Telecom to buy the 50% stake in Brazil's largest cellphone operator, Vivo Participacoes it doesn't already own.

Last April, Telefonica bought an indirect stake in Telecom Italia in what market observers interpret as a move to get its hands on Telecom Italia's Brazilian mobile unit TIM Participacoes.

Telefonica is the world's fourth-largest telecommunications company by market value.

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

(END) Dow Jones Newswires"

Posted to the site on 21st June 2007