Telefónica Seeks Government OK for Spanish dTV Merger

07 May 2002

Spanish telecoms giant Telefónica is reportedly asking the nation’s government to drop opposition to a merger between its digital TV platform Via Digital and Spain’s market leader Canal Satellite Digital.

Like many European dTV operators, Via Digital is bleeding cash at a life-threatening rate, having lost €162 million ($148m; £101m) last year. Telefónica is hoping ministers will look kindly on a deal with Canal in light of the woes suffered by counterparts such as ITV Digital in the UK, Premiere World in Germany and Spain’s Quiero TV which shut down late last month.

News of a potential merger came as a surprise to Canal, which boasts 1.2m subscribers compared with Via’s 806,000 and has fewer financial ills. The company, controlled by Vivendi Universal and Spanish media group Prisa, said it is not in negotiations with Via and doubts the government would be receptive.

Telefónica is desperate to reduce losses at its media arm, which posted deficits of €347m last year and €627m the year before. However, ministers may be unwilling to allow the group to offload any media assets, as they are perceived to take a friendly line towards the governing Popular Party.

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