Telefónica Ups Netcom StakeTelefónica Ups Netcom Stake

12:33 PM -- Telefónica SA (NYSE: TEF) firmed up its position in the Chinese service provider market today by agreeing to increase its stake in China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906) to 7.22 percent from 5 percent.

The move, still subject to regulatory approvals, is expected to cost Telefónica €309 million ($452 million). That price would value the Chinese fixed line operator at nearly €14 billion ($20.5 billion).

The Spanish giant, which owns numerous operations throughout Latin America and Europe, including a controlling interest in Telecom Italia (TIM) , first invested in China Netcom in July 2005. (See Telefónica Gets Green Light for TI Stake, Telefónica Boosts Chinese Ties, and Eurobites: Big Guns Fire Salvos.)

China Netcom is one of the carriers expected to be involved in a massive shakeup of the Asian superpower's telecom market in the near future. (See Major Carrier Shakeup Expected in China.)

— Ray Le Maistre, International News Editor, Light Reading