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April 2, 1996


By CBR Staff Writer

British Telecommunications Plc is planning to sue Spain’s national operator, Telefonica de Espana SA, over an alleged dirty tricks campaign in a case which could force the European Commission into proving how serious it is about its drive to promote open competition in the European telecommunications market. British Telecom, which has invested more than $115m in its Spanish operation, complained to the Spanish competition courts alleging anti-competitive practices. If it fails to get anywhere in Spain, it has threatened to take its action to the European Commission which is fervently pushing for free competition. British Telecom alleges that Telefonica has been undermining its operation by discovering who its customers are and deliberately undercutting its prices. British Telecom has to use Telefonica to connect its customers in the local loop, and has alleged that Telefonica delays connecting them until it has a chance to undercut the British Telecom offer. The UK phone company said Telefonica has abused its position of power and we have asked the competition services to investigate the situation. British Telecom established its Spanish operation with Banco Santander in April 1994 but it still, under European law, is not allowed to carry voice traffic, only data. Thus far, it has attracted a base of around 600 corporate customers.

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