Telefonica says it will not acquire OTE, TIM

Telefonica ruled out acquisitions of Greek operator Hellenic Telecommunications Organization OTE and TIM Brazil, saying such purchases would exceed its self-imposed investment cap, an Associated Press report said.

The Associated Press report quoted company CFO Santiago Fernandez Valbuena as saying that such purchases were neither strategically nor financially viable for Telefonica.

Instead, Telefonica wanted to stick to its planned mergers and acquisitions cap of 1.5 billion euros ($1.92 billion) until the end of 2007, Fernandez Valbuena said.

The Spanish telecoms giant recently made two small deals, buying a stake in Brazil's TV operator TVA and participating in Hong Kong's PCCW, but Fernandez Valbuena did not give any details of those deals, the report said.

Fernandez Valbuena said Telefonica, the world's fourth-largest telecom operator by number of subscribers, had considered a possible bid for OTE before purchasing both British mobile operator O2 and the Czech Republic's Cesky Telecom AS last year.

'It (the purchase of OTE) might have made sense, but now the strategic merit is much lower, and is not financially viable,' he said in the report.

An acquisition of TIM Brazil was hampered by a reported $7.7 billion offer on the table from Mexico's America Movil SA, Fernandez Valbuena said.