April 4, 2011 / 3:49 PM / 8 years ago

UPDATE 1-Telefonica loses Spanish market share, Yoigo grows

* Movistar Feb mobile share 41.46 pct, vs 41.58 pct in Jan

* Internet customers 52.21 percent, vs 52.64 percent

* Alternative operators take customers by cutting prices

* Yoigo mobile share rises to 4.33 percent from 4.09 pct

* Telefonica shares up 0.6 percent

(Adds graphic, detail on internet market share)

By Robert Hetz and Sarah Morris

MADRID, April 4 (Reuters) - Spanish group Telefonica (TEF.MC), the euro zone’s largest telecoms operator, lost market share on its home turf in February as customers switched to rivals like Nordic operator TeliaSonera’s TLSN.ST Yoigo.

Telefonica’s share of the mobile market slipped to 41.46 percent from 41.58 percent in January while its grip on the broadband market eased to 52.21 percent from 52.64 percent, the Telecoms Market Commission said on Monday.

Analysts have been studying how Telefonica is bearing up in Spain where a severe downturn has accelerated competition in a market the former state monopoly still dominates. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic on the evolution of the market:

here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

N+1 Equities said in a note to clients on Monday it was moderating its positive stance on Telefonica, considering Spain remained a problem for the operator.

“EBITDA should continue falling until 2014, and margins will remain under pressure. The problems in Spain are lasting longer than we expected and dragging down growth and financial flexibility,” it said.

Some 449,000 customers switched operators in February while keeping their number, with Telefonica’s Movistar and Vodafone (VOD.L) the biggest losers, shedding 42,623 and 21,087 net customers respectively.

“The high figures for portability continue to show the sensitivity to prices for customers and the strong competition among operators,” the Telecoms Market Commission said.

Yoigo, Spain’s fourth mobile operator and controlled by TeliaSonera, continued to do well in a downturn which has left one in five Spaniards out of work. The operator took 35,867 customers more than it lost, increasing its market share to 4.33 percent in February from 4.09 percent.

TeliaSonera’s recent success in Spain could mean it might decide to hang on to a unit it previously said it wanted to sell.

Orange FTE.PA was the second biggest winner in mobile portability, with 18,866 more customers in February, boosting its share to 20.22 percent from 20.15 percent.

Competition is also increasing for Telefonica in the broadband market where the share held by regional cable operators and national cable operator Ono [ONOCA.UL] increased to 19.43 percent from 19.40 percent.

Other internet providers, such as Jazztel JAZ.MC, also rose to 28.35 percent from 27.96 percent.

Telefonica shares were up 0.3 percent at 1545 GMT, with the European telecoms sector .SXKP also up 0.3 percent. (Editing by Dan Lalor)

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