MADRID/DUBAI - Saudi telecoms group STC has not changed its plans to effectively raise its stake in Telefonica to 9.9%, two sources familiar with the matter told Reuters, following a Spanish newspaper report that it now only intended to keep its current 4.9% stake.

In September, Saudi Arabia's largest telecoms operator amassed a stake worth 2.1 billion euros ($2.23 billion), consisting of 4.9% of Telefonica's shares and financial instruments that give it another 5% in so-called economic exposure to the company.

While it acknowledged seeking to become Telefonica's top shareholder, it said then it did not intend to acquire control or a majority stake.

El Economista newspaper reported on Monday, citing people familiar with the operation, that STC no longer planned to convert the 5% it holds in derivatives into voting shares.

Telefonica and STC declined to comment on the report. The Spanish government also had no comment.

Asked about the report, one of the sources familiar with the matter said STC's position had not changed from what was announced in early September.

As Telefonica is considered a defence service provider, the Spanish Defence Ministry has a say in acquisitions and holdings between 5% and 10% unless the buyer commits not to request a seat on the board.

STC has still not requested authorisation from the Spanish government to exercise the voting rights corresponding to the financial instruments.

On Tuesday, Spain's state fund SEPI said it was considering whether to buy a stake in Telefonica, while Spanish banks BBVA and Caixabank, two major shareholders in the Spanish telecoms company, have welcomed STC's investment and ruled out increasing their own stakes.

($1 = 0.9420 euros)

(Reporting by Jesús Aguado in Madrid and Hadeel Al Sayegh in Dubai; additional reporting by Belen Carreno and Inti Landauro; Editing by Andrei Khalip and Anousha Sakoui)