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Europe

Optimism at Telefónica

9:35 AM -- As much of the rest of the developed world flies into a financial panic, Spanish giant Telefónica SA (NYSE: TEF) is leaning back in its comfy chair, smoking a cigar and sipping a fine brandy.

Well, that's the impression we got today when the carrier issued a statement to investors noting that in the "current environment of high uncertainty and volatility in the stock markets and restrictions in the credit markets," it is sticking with its full-year financial guidance. Telefónica notes that preliminary results for its third quarter "reflect the continuity of the trends recorded in the first six months of the year across main markets." (See Telefónica Reports H1.)

That guidance includes a rise in annual revenues of between 6 percent and 8 percent, and an increase in annual operating income of between 13 percent and 19 percent. In 2007, Telefónica reported revenues of €55.6 billion (US$76 billion) and operating income of €11.5 billion ($15.7 billion).

The news helped push the carrier's share price up by more than 7 percent to €14.79 on the Spanish exchange.

Telefónica displayed further confidence in the telecom services market, which it says "continues offering a significant growth potential," by increasing the price it is willing to pay to take total control of Compania de Telecomunicaciones de Chile S.A. (CTC), popularly known as Telefónica Chile.

Telefónica wants to buy the 55 percent of CTC it doesn't currently own, but had its initial offer blocked last week by minority shareholders. Now it has raised its offer by 10 percent to around $940 million in the hope of securing the acquisition.

— Ray Le Maistre, International News Editor, Light Reading

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