Brazil Regulator:Bid Conditions On Telefonica Not Vivendi-Report

RIO DE JANEIRO (Dow Jones)

The Brazilian Telecommunications Authority, or Anatel, imposed a number of conditions on Spanish telephone giant Telefonica SA (TEF, TEF.MC) in order to bid for local phone provider GVT (GVTT3.BR), the Estado news agency reported Thursday.

Rival bidder France's Vivendi (VIV.FR, VIVEF) was exempted from any restrictions as it did not already operate in Brazil, Anatel said.

Anatel earlier Thursday pre-approved the right of both Vivendi and Telefonica to bid for GVT.

The conditions for Telefonica's bid include keeping its existing operations separate from GVT's.

Telefonica's existing Brazilian subsidiary is Telesp (TLPP3.BR). Telesp's role in regard to GVT will extend no farther than making a bid on behalf of Telefonica.

Telefonica must also maintain the name of GVT if it makes the winning bid.

Any overlapping operating licenses must be returned and Telefonica must invest in research.

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; john.kolodziejski@dowjones.com