Telefonica closes in on Asia Netcom Spanish giant has inside track after building 5pc stake in China Netcom.

(From South China Morning Post)

Byline: Georgina Lee and Ken Lo

China Netcom Group is in talks with suitors including Spanish telecommunications giant Telefonica to sell a strategic stake in its undersea cable carrier, Asia Netcom.

Sources close to the talks identified Telefonica as having the inside track and said the Spanish firm had also discussed taking a controlling stake in Asia Netcom. "China Netcom is very focused on Telefonica," one source said.

"Asia Netcom has never been a big part of the group," another source said. "Plus, it is losing money and is a burden."

Telefonica paid {euro}240 million ($2.1 billion) for a 3 …