The European Investment Bank (EIB), the European Union's long-term financing institution, has advanced a loan of 60 billion pesetas (ECU 360 million)(1) to AIRTEL MÓVIL S.A. for installation of its GSM mobile telephony network. The finance contract was signed this morning in Madrid by the EIB's Director for Lending Operations in Spain, Dr Armin Rose, AIRTEL'S President, Dr Juan Abelló, and Managing Director, Dr Ignacio S. Galán, and representatives of the 32 banks making up the syndicate guaranteeing the loan, which includes Spain's major financial institutions.

AIRTEL MÓVIL, which in 1994 obtained the second GSM Digital Mobile Telephony licence in Spain, owns a network which by the end of 1997 should cover 95% of the Spanish population. The works being financed under this operation form part of the first phase in the company's investment programme, which includes bringing into service before the end of the year more than 4 000 base stations spread throughout the country, together with the associated control stations and switching equipment.

The loan concluded with AIRTEL follows on from the 500 billion pesetas (ECU 3.5 billion) made available by the EIB in support of the telecommunications sector in Spain since the country's accession to the European Community in 1986. The bulk of these funds (80%) has gone towards funding expansion of the basic telephone network and installation of digital equipment. More recently the EIB has been financing development of the basic infrastructure for mobile telephony services, an expanding market in all the countries of Europe.

The EIB was founded in 1958 by the Treaty of Rome, which established the European Economic Community, for the purpose of fostering integration, balanced development and economic and social cohesion in the Member States, by means of long-term financing for capital investment contributing to attainment of the European Union's objectives. Modern telecommunications systems allow for Europe's various regions to be interconnected more effectively, thereby promoting development and fostering the process of European integration.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30/6/1997, when ECU 1 = 0.68 GBP, 6.64 FRF, 1.13 USD, 0.75 IEP, 166.484 ESP.