LONDON, July 25 (Reuters) - Spanish telecom giant

Telefonica is in exclusive talks to sell its Mexican

business to Beyond ONE, the owner of Virgin Mobile Mexico, three

sources with knowledge of the negotiations said.

The Spanish company has accelerated plans to reduce its

exposure in Spanish-speaking Latin America, where profitability

is lower than the cost of capital, and to focus instead on four

main markets under new CEO Marc Murtra.

Telefonica declined to comment. Dubai-based digital services

provider Beyond ONE did not immediately respond to requests for

comment.

The sources said that a deal was not certain and asked not

to be identified because the matter is confidential.

The Mexican business could be worth 520 million euros

($609.28 million), according to a research note published by

Kepler Chevreux in June. Beyond ONE acquired Virgin Mobile Latin

America, a mobile virtual network operator (MVNO) with clients

in Mexico and Colombia, in 2023 for an undisclosed amount.

One of the sources said the creation of a new antitrust

commission - proposed by Mexico - could delay any telecoms deal

because it will create uncertainty about getting regulatory

approvals. The proposed body would have power over telecoms

companies.

Telefonica has said it want to focus on the four core

markets of Brazil, Britain, Germany and Spain, with Murtra

planning to unveil a new strategy for the company in the second

half of this year.

It agreed to sell its Argentina unit to Telecom

Argentina for $1.245 billion in February, and is working with

advisors for a sale of its business in Chile and Ecuador. It

also reached an agreement in May to sell its Uruguay business

for $440 million to Luxembourg-based Millicom International

.

($1 = 0.8535 euros)