ANTIQUES SHOPS

Higher taxes and mounting competition are also posing challenges for the African country's three major telecoms players as they battle to tap the potential of a relatively underpenetrated market.

Sudan lost three-quarters of its oil output when South Sudan became independent in July, ending its main source of state revenue and foreign currency.

That made the telecoms sector even more critical to the wider economy and it now accounts for about 12 percent of gross domestic product, according to No.1 operator Zain Sudan, a unit of Kuwait's Zain.

Yet operators are struggling to buy hard currency from the government.

"The availability of foreign currency is a big issue for telecoms companies because we depend on imported services and equipment," Zain Sudan chief executive Elfatih Erwa told Reuters.

He said Zain had sometimes delayed payments to foreign suppliers, but these were still delivering on schedule. Ericsson and Huawei are Zain's main suppliers.

State-owned Sudatel has faced similar problems.

"It (the equipment) is mainly from Asia," said Mohamed Nasir, Sudatel director for corporate sales. "There are limitations in the use and transfer of U.S. dollars. We are talking about Chinese companies like Huawei mainly. It (deliveries) can be delayed - if something took one month (before), it may take two months now."

MOUNTING PRESSURE

The dollar shortage is an indicator of the mounting pressure on the Sudanese pound.

Last month, the government allowed licensed dealers to trade the pound at a devalued rate of about 5 to the dollar. This compares with the official rate of 2.7, while there are two other exchange rates - the black market rate of around 5.4 and the commercial bank rate, which is about 4.9.

"We don't work in the black market, we deal with banks and they charge us a premium," said Erwa. "It's a little bit lower than the parallel (black) market price. The official price is still the same as before."

Zain Sudan's 2011 local currency earnings rose 9 percent, but these fell 5 percent in dollar terms and its parent firm has been blocked by Sudanese law from repatriating earnings to Kuwait for several years.

These woes, along with mounting competition between Zain Sudan, Sudatel and MTN Sudan, a unit of South Africa's MTN , have taken away some of the sector's lustre, with Zain Sudan's average revenue per user (ARPU) falling by half between 2008 and 2011 to $8.

Higher taxes are adding to the burden. In December, Sudan raised sales taxes on telecoms companies to 30 percent from 20 percent and a profit tax to 30 percent from 15 percent.

Yet the market retains huge potential should Sudan and South Sudan's economic woes ease.

Mobile penetration in Sudan is 67 percent, according to analysts Wireless Intelligence. This compares Northern Africa's 96 percent, while South Sudan penetration is just 18 percent, one of the lowest globally.

ARPU is also higher than the Northern Africa mean of $6.47 - Sudan's is $6.90 and South Sudan's is $10.49.

South Sudan has five mobile operators - Zain, Sudatel and MTN, plus two local firms. (Reporting by Matt Smith; Editing by Mark Potter)

The yield on Spanish 10-year bonds hit a fresh high of above 7 percent on Monday as initial relief over the victory of pro-bailout parties in Greece gave way to ongoing fears of deeper problems facing the bloc.

Seven percent is considered too pricey for a country to afford over the long term. Such levels have previously led to bailouts in Greece, Ireland and Portugal.

Treasury Minister Cristobal Montoro told the Senate during a budget hearing on Monday that the European Central Bank should step in to fight market pressure, essentially a call for the bank to buy Spanish debt again, something it is very reluctant to do.

Spain's Treasury will issue between 2 billion and 3 billion euros ($2.52 billion-$3.79 billion) of 12- and 18-month debt on Tuesday, followed by between 1 billion and 2 billion euros of bonds due in 2014, 2015 and 2017 on Thursday.

Monday's market response to the Greek election - in which parties committed to the conditions of a European Union/International Monetary Fund bailout won by a narrow margin - suggest the prognosis is not good.

"It looks as though the market's broken now. I don't think there's anything the Spanish can do to bring it back. I don't think the ECB can bring it back... (a full sovereign bailout for Spain) is inevitable," said Harvinder Sian, a rate strategist at London-based RBS.

"With the (G20) summit not looking like it will produce anything particularly dramatic to help in the crisis situation, I think the market's made its statement. There has to be a change in the way the Europeans are attacking the crisis."

As options for the government to raise debt at an affordable price run out, Madrid is studying issuing some 6 billion euros via the state-held cash cow, the lottery company, Expansion reported on Tuesday, citing sources.

European leaders agreed on Monday to move towards a more integrated banking system to stem the debt crisis during a meeting of world heads in Mexico for a G20 summit.

BAILOUT WORRIES

Spain, the euro zone's fourth-largest economy and more than twice the size of bailed-out euro zone partners Greece, Portugal and Ireland combined, is at the centre of market jitters as it struggles with a deep recession and banking sector restructure.

The 12-month bill was trading on Monday in the secondary market, considered a good guide of primary auction yields, at around 4.9 percent.

Last month, the 12-month auctioned at 2.985 percent.

Thursday may be a bigger test, when Spain auctions bonds maturing April 30, 2014, July 30, 2015 and July 30, 2017.

On Monday, the 2014 bond was trading at around 5.5 percent compared with 2.069 percent at its last primary auction on March 1. The 2015 bond was trading above 6 percent after 4.876 percent on May 17 and the 2017 was trading at 6.7 percent, compared with 4.96 percent on May 3.

Spain's economy is under heavy pressure.

It entered its second recession since 2009 in the first quarter, and while it has barely grown at all since the property bubble burst in early 2009, most economists expect the economy to continue to shrink into next year at least.

Unemployment is over 24 percent, more than half all young Spaniards are out of work and deep spending cuts to tame one of the euro zone's largest public deficits are expected to prolong the downturn as investment plummets.

($1 = 0.7921 euros)

(Editing by Fiona Ortiz/Jeremy Gaunt and Alessandra Rizzo)