USA: GTE IN OVERSEAS EXPANSION TALKS - PAPER.

Date: Jan 13, 1995

NEW YORK, Jan 13 (Reuter) - GTE Corp is in talks to establish joint ventures in China and Spain and intends to double its international business to $5 billion annually, the Wall Street Journal reported on Friday.

GTE hopes to reach the $5 billion figure in five years, in an effort to reach beyond the slower growth local telephone market in the United States, the paper said.

People familiar with the talks told the paper that GTE is negotiating to assist China in the construction of phone networks and to provide billing, network management and research and development for them.

An announcement of a memorandum of understanding between GTE and China could come as early as Sunday night in Beijing, the paper said.

GTE has been in talks with Telefonica SA, Spain's national carrier, to expand their operations in Latin America, the paper said.

The shaky economy in Mexico has complicated negotiations between the two, the paper said.

GTE is reluctant to enter a deal until the crisis is over, the paper said.

GTE's alliance in China is expected to be a 50-50 joint venture partner with the China United Telecommunications Corp, which is building the Unicom network for China's electronics, railways and power industries, the paper said.

Regarding the talks with Telefonica, GTE has discussed several options, including a $1 billion investment in Telefonica's international business.

GTE, however, is eager to enter the Brazilian market, but Telefonica's extensive Latin American operations are absent there. A person familiar with the talks told the paper GTE vice chairman Michael Masin has met with Brazilian officials seeking approval for GTE to invest there.

Growth in the U.S. phone business is slowing and GTE is looking to expand upon the international revenues, which make up only 13 percent of its revenues last year, the paper said. Total 1994 revenues were not yet posted.

GTE earned $990 million in 1993 on sales of $19.7 billion. -- New York newsdesk -- 212 859-1610 Equities

(c) Reuters Limited 1995. All rights reserved.