UPDATE:Telefonica To Raise Bid For PT's Half Of Brazil Joint Venture

Spanish telecommunications giant Telefonica SA (TEF, TEF.MC) is planning to raise its bid for Portugal Telecom SA's (PT, PTC.LB) half of the two companies' Brazilian joint venture to between EUR5.9 billion and EUR6.8 billion, a person close to the situation said Tuesday.

The person said Telefonica has been in talks with PT and key shareholders at the company--including Portuguese banks Banco Espirito Santo SA (BES.LB) and Caixa Geral de Depositos--about a price that would be agreeable to them.

"They asked us to raise the price," said the person, who declined to be named.

Telefonica had previously offered EUR5.7 billion for PT's half of Brasilcel, a holding company that owns about 60% of Brazilian cell phone operator Vivo Participacoes SA (VIV), an offer which PT promptly rejected.

The Brazilian venture is considered strategic by both Telefonica and PT, which face stagnant revenues in mature European markets, positioning Brazil as their main growth platform.

Brazil had a total of 179 million cellphone subscriptions in March - equivalent to 93% of the population. That's 17% higher than the year before.

- By Jason Sinclair, Dow Jones Newswires; [phone]; [e-mail]