UPDATE 3-Telefonica sees mobile clients surging in Mexico

* Telefonica sees subscribers rising 16 pct in Mexico

* Awaits spectrum auction, network tender

* Mexico's government looks for more competition (Adds quote, background, byline)

By Tomas Sarmiento

MEXICO CITY, May 20 (Reuters) - Spanish telecommunications group Telefonica, the operator of Mexico's No. 2 mobile phone network, plans to boost its Mexican subscriber base 16 percent this year, a senior executive said on Wednesday.

Telefonica (TEF.MC) is anxious to take part in a long-delayed auction of radio spectrum and is also interested in a government plan to tender the operation of a fiber-optic network, Fabian Bifaretti, the company's top executive for Mexico and Central America, said at a news conference.

The Federal Electricity Commission said on Tuesday it would tender the management and maintenance of two strands from its 27,000 kilometer fiber optic network in a bid to improve competition in telecommunications.

Regional heavyweight America Movil (AMXL.MX) (AMX.N), owned by billionaire Carlos Slim, is Mexico's leading cellphone operator with about 58 million subscribers.

"We hope to end the year around or above 18 million clients," Bifaretti said.

Launching a new fiber-optic backbone across Mexico could affect dominant fixed-line operator Telmex (TELMEXL.MX) (TMX.N), also controlled by Slim, which owns nearly all the country's telephone cables and even the copper wire leading into homes.

Mexico's government says more competition is needed in telecommunications to bring down prices and improve access to Internet services.

"In broadband, our country is one of the furthest behind in Latin America," Bifaretti said.

Telefonica has won nearly 20 percent of Mexico's mobile telephone market since moving into the country in the past decade, helping create meaningful competition against America Movil, which controls most of the rest of the market. (Writing by Noel Randewich; editing by Gunna Dickson)