Digital Rivals Combine to Form Spanish Pay-TV Monopoly

10 May 2002

As predicted [WAMN: 07-May-02], Spain’s two dTV operators – Vivendi-owned market leader Canal Satellite Digital and Via Digital, a unit of Spain’s largest company – are to merge, forming a pay-TV monopoly with 2.5 million subscribers and sales of €1.3 billion ($1.2bn; £0.8bn).

Telefónica, owner of cash-haemorrhaging Via, has forged an agreement to create the single company with the parent of Canal,- Sogecable (controlled by Vivendi Universal and Spanish media company Prisa).

Under the three-way deal, Telefónica will contribute to a 23% capital increase in Sogecable, resulting in an expanded firm in which Via’s owner will take an equal stake alongside Vivendi and Prisa.

The latter pair, however, will retain control under an existing pact. Telefónica will nominate a new chairman at the enlarged Sogecable, but chief executive Javier Diez de Polanco (coincidentally a nephew of the Prisa chairman) will retain his post.

The complex deal is subject to scrutiny by competition regulators, though it reportedly has the approval of the Spanish government.

Telefónica has lately been lobbying ministers to drop opposition to the tie-up, claiming Spain’s pay-TV market is too small to support competing services, especially in light of high-profile dTV failures elsewhere in Europe.

Data sourced from: Financial Times; additional content by WARC staff