Telefonica shares soar on new dividend plan

Shares in Spanish telecommunications giant Telefonica soared after the company announced a new dividend program an Associated Press report said.

The report also said the firm was aiming to quickly increase earnings through 2010.

The Associated Press report also quoted company chairman Cesar Alierta as saying that the former telecommunications monopoly will be selective in mergers and acquisitions and limit that activity to the markets in which it already operates.

Telefonica, the largest telecommunications company in Spain and Latin America, said it would distribute 1 euro per share in 2008 dividends, the report said.

Telefonica also targeted worldwide organic customer growth of 40% to December 2010, which would bring the company's total customer base to 290 million.
Telefonica said the growth is backed by Latin America's fast growing economies, which have relatively low telephony penetration, the report said.

Telefonica's aggressive acquisition strategy over the past years raised the company's debt and made investors nervous, the report said.