Recession-hit Spaniards ditched mobile phone lines in record numbers in October, with the two biggest operators continuing to haemorrhage market share to smaller rivals offering subsidies on handsets. Spain, where there are more mobile phones than people, has been hit by a slump that has left one-in-four unemployed and led to a falling number of active phones. Some 486,000 phones were cut off in October, telecoms regulator CMT said on Monday.

Movistar - Telefonica's mobile operator - lost 284,000 lines in October, while Vodafone, the second-biggest player, shed 278,000 customers, CMT said. The figures showed a 3.8 percent year-on-year drop in mobile phone numbers as the country battles sky-high unemployment and its second recession in three years.

"The mobile sector in Spain is not recovering. This marks nine consecutive months of falls Yoigo and virtual mobile operators are gaining clients but they cannot compensate for the losses at Movistar, Vodafone and Orange," CMT said. A mobile price war has heated up in recent months after Telefonica and Vodafone's market share slipped since their decision to stop subsiding smartphones in the spring.

Almost 2 million Movistar lines have been cut off since March when it stopped subsidies, according to CMT monthly data. The debt-laden company introduced new bundled offers in October in a bid to retain market share. When Telefonica reported results in November it said 430,000 customers had signed up to its "Fusion" package which offers television, broadband, fixed line and mobile. Orange and Vodafone have introduced similar offers and Vodafone also decided to reintroduce handset subsidies in November.

Copyright Reuters, 2012