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Spain's Telefonica SA (TEF) said Wednesday it opposes a new tax Spain's government is proposing for telecommunications companies to compensate for phasing out advertising at state-owned television station TVE.

"It's an additional tax that doesn't have anything to do with the (telecommunications) sector, and doesn't benefit us at all," head of Spanish operations Guillermo Ansaldo said on the sidelines of a mobile fair.

Earlier this month, Spain's government said it had drafted a law to levy a 0.9% tax on the gross revenue of telecommunications operators and a 3% tax on the gross revenue of private television stations to compensate for phasing out advertising at TVE.

Ansaldo added Telefonica was still studying the new legal framework, but didn't rule out an appeal to Spain's telecommunications regulator or the European Commission.

Telefonica SA (TEF), Vodafone PLC (VOD) and France Telecom SA (FTE) are the company's biggest telecom operators and will likely be most severely affected by the tax.

The new legal changes still need parliamentary approval, although analysts say they are likely to be approved. A TVE labor union with access to the plan said earlier this month TVE would drop advertising as of September.

Company Web site: www.telefonica.com

-By Jason Sinclair, Dow Jones Newswires; 34 913958127; jason.sinclair@dowjones.com