Telefonica de Espana SA’s telephone equipment suppliers Amper SA and Alcatel Standard Electrica SA are making plans for diversification and foreign expansion following the Spanish Telecommunications Order Law passed in December 1987 which included the liberalisation of telephone terminal equipment. Under this act, any Telefonica-approved models can be sold, causing a possible loss of market share for Amper and Alcatel in the Spanish markets. Consequently, Alcatel has been negotiating, via its Alcatel Sitesa division, a joint venture for the manufacture of a range of domestic phones with Amstrad Plc, which would sell them initially in Spain, through its 3,500 points of sale, and then across Europe via its extensive distribution network. The product would be jointly developed by the two companies, but manufactured in Alcatel Sitesa’s Malaga plant, where output would be increased by tens of thousands of units. Amstrad’s plan is to test market the product in Spain before launching it in the rest of Europe, and the partners hope that manufacture can start before the end of the year. Meanwhile Amper has signed an agreement with Olivetti & Co SpA whereby the Spanish company, or its subsidiary Elasa, will manufacture office telephones based on technology similar to that used in the Amper developed Tarsis model with memory for 10 stored numbers, abbreviated dialling and VLSI electronics and Olivetti will provide an avant-garde phone design, as well as marketing the product in Italy via its extensive network there. Amper uses the same technology in its joint venture plant, Telur, in Perm in the Soviet Union. The development plans have the full support and encouragement of the Spanish Ministry of Industry.