Spain’s Telefonica has expressed its desire to invest $1.14 billion in Brazil in 2010, compared with expected capex of around 2.4 billion reais figured for 2009.

Addressing to reporters, Valente said, “The investment probably will be bigger than 2 billion reais.”

Moreover, Telefonica was also preparing for a proposal for a more “aggressive” pricing of its fast Internet access to handle the increase in competition from France’s Vivendi in the Brazilian market.

Telefonica has been facing a fall in revenue from its fixed-line business and with suspensions because of the poor-service quality in 2009.

According to analysts, “Problems for Telefonica might be aggravated after its failed attempt to buy Brazilian telecoms company GVT.”

Valente's remarks come after market participants and regulators questioned the way Vivendi won control of GVT. In November 2009, Vivendi purchased around 37% of GVT shares and had signed a deal to buy a further 19% stake via irrevocable options with third parties.

Vivendi has acquired so far about 60 percent of GVT.

"We have been abiding by the law and with transparency in our offer for GVT," Valente told reporters in Sao Paulo.

"(The loss of) GVT was sad for the company."