BRITISH Telecom and its American partner MCI have entered the vast Spanish speaking Telecoms world, leaving Asia as the only advanced market they have yet to conquer. The deal is a blow to Telecom Eireann's strategic partners.

In a long expected move, flagship Spanish telecoms carrier Telefonica de Espana jointly announced with BT and MCI that it had joined BT, allowing BT's Concert alliance with MCI to pursue the booming Latin American communications market which is expected to be worth $60 billion by 2000.

The deal, which was unwittingly revealed by Concert's newest partner, Portugal Telecom, earlier this week, deals a blow to BT and MCI's arch rival, US phone giant AT&T Corp, and heralds a major change in the telecoms landscape across the Americas and Europe.

The move to Telefonica is also a blow to the European grouping Unisource, with which the Spanish group wad previously aligned. Telecom Eireann's two strategic partners, KPN of Holland and Telia of Sweden, are members of the Unisource group.

A spokesman for Telecom Eireann said that its agreements were with KPN and Telia and that Telefonica's departure would not affect its strategic alliance. A senior Unisource spokesman said the consortium is still in shape to compete fully with its main rivals.

Unisource itself has a business communications joint venture with AT&T Corp called AT&T Unisource, which the spokesman said remained on track after Telefonica's alliance with MCI and BT the Spanish company said it was also setting up a pan American joint venture between its international unit and MCI, a move that effectively ends all Telefonica's relationship with AT&T and its Unisource European venture.

To reinforce its new deal with Concert, Telefonica is taking a 1 per cent stake in BT and BT is taking a 2 per cent stake in the Spanish group. The news caps a week of furious negotiations among the new partners who announced that both BT and Telefonica had clinched a strategic alliance with Portugal Telecom which is a key player in South America's biggest market, Brazil.

Global telecoms groups like Concert are trying to plug holes in their coverage and make up for growth lost in home markets.

But some experts are warning that such vast investments abroad might be too risky. One such area of concern among the analyst community, is BT's proposed $20 billion merger with MCI.