U.S./French Group Wants Spain License

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Madrid, Spain -- Investment in Spain's burgeoningtelecommunications and cable market took another step forward last week with a major bidfor the country's third national telephony service.

A group of U.S. investors, together with their partners inSpanish cable, joined with France Telecom in a bid for the license.

If awarded the license as the sole bidders, the playerswill compete against Telefónica de España and Retevision in Spain, which is consideredone of a handful of major European countries with the greatest promise as far as newexpansion in telecommunications and cable. The bidders have pledged to invest a minimum of100,000 million pesetas ($666 million) in the new Spanish telephony network.

France Telecom said in a prepared statement, "TheSpanish market offers particularly strong potential."

"Our goal is to become a global telecom operator inSpain," said Patrick Teixido, general representative of France Telecom in Spain."We will also bid for the third mobile-telephony license."

British Telecommunications plc was also expected to file abid, but it pulled out in the end.

"We're concentrating on establishing ourselves asan effective global operator in Spain," said Peter Bonfield, BT's CEO. But, headded, BT "will wait until the full liberalization of the market [in December] tooffer basic telephone services."

Sources speculated that in the end, BT decided not to bidon the license because of its relationship in long-distance services with Telefónica.

The national telephony license pursued by France Telecomand its partners is expected to be awarded in May by the Ministry of Fomento, the Spanishregulator.

Linking with France Telecom is a newly formed consortiumcalled Lince, with France Telecom's partners identified as the players involved inSpanish MSO Cableuropa: Bank of America parent BankAmerica Corp., NBC parent GeneralElectric Co., Callahan Associates, Spanish group Multitel and others. The Cableuropa groupis also bidding for cable franchises in Madrid with France Telecom.

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