Spain’s CNMC watchdog is to meet tonight to vote on the board’s recommendation that it approve Telefonica’s 56% acquisition of Canal+ (DTS), TelecomFinance understands.
The assumption is that the regulator, which brings together the country’s…
Spain’s CNMC watchdog is to meet tonight to vote on the board’s recommendation that it approve Telefonica’s 56% acquisition of Canal+ (DTS), TelecomFinance understands.
The assumption is that the regulator, which brings together the country’s competition and sector authorities, will in a joint session approve the controversial acquisition – with the condition that Telefonica must resell half of its premium channels, reports El Economista.
Telefonica currently owns 44% of Canal+, also known as Distribuidora de Television. It agreed to buy a 56% stake from media conglomerate Prisa in May for €750m (US$792m).
The deal triggered competition concerns – especially from rivals Orange and Vodafone – because the combined Canal+/Movistar TV (which Telefonica already owns) would control 85% of the market by revenue and 70% by subscriber numbers.
They have demanded that Telefonica resell at least 75% of content premium.
In future, Telefonica must redesign its high-value content distribution in order to keep unique premium content. Under the spotlight are football games, motorcycling, Formula 1, TV series and foreign movies, according to El Economista.
Less controversial than high value content distribution will be the CNMC’s supervision of third-party network access. This means that video-on-demand companies like Netflix will have unrestricted access to Telefonica’s high quality connections.
Julio Gomez, the head of regulation at Orange Spain, was last week quoted saying that the initial conditions for approving the deal “would not just affect the TV sector, but would also have a negative impact on telecom services competition, leaving rivals with no way of competing with Telefonica”.
If the approval goes ahead, after a nine month review, it will be the first large merger to be approved by the unified regulator in its nearly two years of existence.
