Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Telefonica Said Poised to Pick Alcatel on Spanish Network

Telefonica Said Poised to Pick Alcatel on High-Speed Network
The headquarters of Telefonica SA stand illuminated by evening light in Madrid. Photographer: Denis Doyle/Bloomberg

Feb. 17 (Bloomberg) -- Telefonica SA, Spain’s biggest phone company, is poised to award Alcatel-Lucent an order to build a nationwide high-speed wireless network as it seeks to win back customers of data-hungry devices lost to rival operators, two people with knowledge of the matter said.

Alcatel-Lucent, France’s largest phone-equipment maker, is the front runner to supply gear for the network based on the so-called long-term evolution technology, said the people, asking not to be identified because the deliberations are confidential. Telefonica plans to unveil details on its network strategy later this month at the Mobile World Congress in Barcelona, one of the people said.

Alcatel-Lucent jumped 5.1 percent to the highest price in more than three months. Telefonica may need to spend about 300 million euros ($394 million) to build the LTE network to cover about 65 percent of the Spanish market, based on the amount Vodafone Group Plc invested in Germany, according to Robin Bienenstock, an analyst at Sanford C Bernstein in London. Madrid-based Telefonica is seeking to bolster its Internet offerings as competition increases in a weakening home market amid the debt crisis.

“LTE will be important, especially in rural areas” where download speeds may be limited to about 2 megabits per second, Bienenstock said. “In the absence of significant cable coverage, Telefonica’s wireline customers are threatened by faster speeds available through LTE, hence the company has to build LTE to prevent further revenue declines in these areas.”

Trial Networks

A Telefonica spokesman declined to comment, as did a spokesman for Paris-based Alcatel-Lucent.

Alcatel-Lucent rose 9.1 cents to 1.87 euros in Paris, the highest level since Nov. 3. The stock has gained 55 percent this year, valuing the company at 4.3 billion euros. Telefonica climbed 1.4 percent to 13.05 euros in Madrid, snapping two days of losses.

In September, Telefonica announced that Alcatel would help set up test LTE networks in Madrid and Barcelona for businesses and institutions. The plan was to extend high-speed services to all segments in the market from companies to consumers.

At the end of September, Telefonica had 24.1 million wireless customers in Spain, a market with a wireless penetration rate of 129 percent, according to the company. Telefonica competes with Vodafone Group Plc and France Telecom SA’s local units as well as TeliaSonera AB’s Yoigo division.

During the first phase of the trial networks, Alcatel-Lucent provided network infrastructure and China’s Huawei Technologies Co. supplied USB modems.

Ericsson, Nokia Siemens

Alcatel-Lucent is pushing fourth-generation wireless technologies to compete with Ericsson AB and Nokia Siemens Networks. The French gear maker was selected by AT&T Inc. and Verizon Wireless to deploy next generation networks in the U.S.

The company held a 30 percent share of the 4G equipment market at the end of September, according to data compiled by researcher Dell’Oro Group. It trails Ericsson, whose share is estimated at 44 percent.

Alcatel-Lucent is involved in 70 LTE deployment trials worldwide, according to its website, including with China Mobile.

To contact the reporters on this story: Manuel Baigorri in Madrid at; Marie Mawad in Paris at

To contact the editor responsible for this story: Kenneth Wong at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.