Telefonica de Espana SA is negotiating participation in a whole string of international telecommunications companies, either in the form of direct stakes in foreign telephone operating companies companies or by the creation of joint venture subsidiaries. The company’s president Candido Velazquez stated that the company was mainly interested in European Community, Latin American and US companies. He also claimed that the strategy, apart from being a stage in the company’s worldwide policy of diversification within telecommunications, responds to the increasing and beneficial internationalisation of communications, in the face of which, the Spanish phone company must must improve its overall management via large investments and strategic positioning in the international market. Telefonica’s profit, from January to June this year increased by 14% and although the company expects to maintain the level for the whole year, Velazquez admitted that it was low in relation to the company’s assets. He hopes to improve management and thus modernise the company, making it more competitive and able to finance the $21,010 investment it has to make over the next four years. At the moment the phone service in Spain leaves a lot to be desired due to a soaring increase in demand since the country joined the European Community and the need for a complete modernisation programme for the entire system infrastructure. Despite Telefonica’s present equity participation in the Argentine national telephone company Entel SA, and the relative ease of communications in Latin America as a result of common culture and language, Velazquez made it clear that the countries of the European Community and not Latin America were the company’s first objective. He said he would also consider letting foreign companies take stakes in Telefonica or its subsidiaries. Although Telefonica is to have a 10% share in Mercury Communications’ Personal Communications Network consortium, Motorola Inc, with a 20% stake in the venture, is expected to take leadership in terms of equipment and technology. In Spain, Motorola has alliances with Amper SA (in which Telefonica is also a shareholder) and the company is collaborating on extending the cellular phone service with a new system in the 900MHz band.
