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Spain's Telefonica loses market share, Yoigo grows

Source: Reuters - Mon 4th Apr 2011

Spanish group Telefonica, the euro zone's largest telecoms operator, lost market share again on its home turf in February as customers switched to rivals like Telia Sonera's Yoigo for cheaper prices, data showed on Monday.

Telefonica's share of the mobile market slipped to 41.46 % in February from 41.58 % in January while its grip on the broadband market eased to 52.21 % from 52.64 %, the Telecoms Market Commission said.

Analysts are closely studying how Telefonica is bearing up in its home market where a severe downturn has accelerated competition in a market the former state monopoly still dominates.

N+1 Equities said in a note to clients on Monday it was moderating its positive stance on Telefonica, considering Spain remained a problem for the operator.

"EBITDA should continue falling until 2014, and margins will remain under pressure," it said.

"The problems in Spain are lasting longer than we expected and dragging down growth and financial flexibility."

Some 449,000 customers switched operators in February while keeping their number, with Telefonica's Movistar and Vodafone the biggest losers, shedding 342,623 more customers than they gained.

"The high figures for portability continue to show the sensitivity to prices for customers and the strong competition among operators," said the Telecoms Market Commission in its blog.

Spain's fourth mobile operator, Yoigo, controlled by the Nordic telecoms group TeliaSonera, continues to do well in the downturn which has left one in five Spaniards out of work.

The operator took 35,867 customers more than it lost, increasing its market share to 4.33 % from 4.09 % the month earlier.

TeliaSonera's recent success in Spain could mean it decides to hang on to its Spanish unit, which it previously said it wanted to sell.

Orange was the second biggest winner in mobile portability, with 18,866 more customers in February, boosting share to 20.22 % from 20.15 %.

At 1112 GMT Telefonica shares were up 0.61 % to 18.07 euros compared with the STOXX Europe 600 telecoms sector index, up 1.72 %.

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