Advanced Television

Telefonica wins Canal Plus, rivals complain

May 8, 2014

From David Del Valle in Madrid

VIVENDI PORTE SA PARTICIPATION DANS CANAL+ FRANCE À 75%Telefonica’s €725 million takeover of Canal Plus has been accepted by Prisa’s board subject to the approval of the competition authorities.

With the acquisition of a 56 per cent stake, Telefonica now becomes the major shareholder in the pay-TV group with a 78 per cent stake, with Mediaset holding the remainder 22 per cent in the €1.3 billion enterprise.

Telefonica now becomes the pay-TV market leader in Spain with almost 2.3 million pay-TV subscribers, some way ahead of Vodafone-ONO with 789,895 and Orange TV with 76,028.

Rivals have raised concerns with Vodafone and Orange asking for limits on the deal.  Orange has declared the “consolidation” should not be permitted. “None of the incumbents have 80 per cent of the market as Telefonica would have, and the exclusivity on premium content either. The operation would be negative for the competition and should not be approved or if approved it should be with conditions so as not to damage the competition”, said the Regulation director of Orange Spain, Julio Gómez.

Vodafone has announced that it will appeal before the Spanish Competition body CNMC against the operation as it recently did against Telefonica’s campaign to migrate its ADSL clients free-of-charge to fibre optic, including TV packages. Vodafone has accused Telefonica of abuse of a dominant position.

The president of the CNMC, José María Marín Quemada, has said that the operation should be scrutinised by EC as it has “important implications” for the competition in Spain.

Telefonica has taken a very aggressive approach on the Pay TV market with the acquisition of premium and exclusive sport content and an integrated offer with TV, the Internet and Telephony in an attempt to lead the market and boost subscriptions. The company aims to reach 3 million subscribers in 2016 and extend its fibre optic network from the current 3.5 million to 7 millions over the next years.

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