Madrid - Vodafone AirTouch and British Telecommunications (BT), the UK`s two largest cellphone companies, agreed yesterday to share control of Airtel Movil, Spain`s No 2 cellphone company, settling a six-month dispute.
BT would support Vodafone, which owns 22 percent of Airtel, in acquiring up to 55 percent of the Spanish firm, the UK companies said. Once Vodafone acquired that amount, BT would get equal representation on Airtel`s board.
BT could also boost its stake to up to 45 percent, from about 18 percent now, if Vodafone`s percentage went any higher.
``BT has done well by gaining equal board representation,`` said Louisa Greenacre, an analyst at ING Barings in London. ``It`s going to be tough for Vodafone to push through anything that is detrimental to BT.``
Vodafone and BT are trying to gain more subscribers in Europe, where 90 percent of the population is expected to be using cellphones by 2005.
Airtel, with an estimated value of 4 trillion pesetas (about R161 billion), has about a third of Spain`s market.
The fight for control began in November when Banco Santander Central Hispano (BSCH), Airtel`s largest shareholder, said it was ready to swap its stake for shares in a larger business.
Vodafone shares rose as much as 11p, or 3,5 percent, to P3,23 yesterday. BT shares rose as much as 16p, or 1,6 percent, to P10.
BT had also signed an agreement for its data communications and Internet unit in Spain to work with Airtel to provide services, the companies said. BT and Vodafone would also develop websites with Airtel for mobile devices.
``BT and Vodafone aim to increase their presence in the Spanish market and jointly take a greater role in the long-term development of Airtel,`` they said. The companies did not provide details of the plan.
People familiar with the talks said last week Vodafone would use its own stock to buy BSCH`s 30,5 percent stake, and BT would boost its 18 percent stake in Airtel to about a third after Vodafone bought shares from the remainder of the shareholders.
BSCH was not available to comment. Angel Corcostegui, BSCH`s chief executive, said last week the bank aimed to reach a sale agreement for its Airtel stake, valued at more than e7,3 billion (R49 billion), when BT and Vodafone settled their dispute.
Spain is expected to be the fifth largest cellphone market in Europe in 2005, with an estimated 35 million users, compared with 15 million in 1999, according to a report from Chase H&Q. - Bloomberg