The acquisition by Telefonica of Canal Plus will be scrutinised by the Spanish Competition Authorities since the EC has returned the case to Spain on the grounds that it does not have a European dimension.
The National Market and Competition Commission (CNMC) will investigate whether the Telefonica’s deal with Canal Plus and Mediaset to acquire 100 per cent of pay TV platform Canal Plus does not break any competition rule and does not mean any restriction to free competition.
Vodafone, Telefonica’s rival, has already raised doubts about the neutrality of the CNMC as it fears that the National Competition Authorities favours the former monopoly. The CEO of Vodafone, Antonio Coimbra, has asked the CNMC to be “implacable” over Telefonica and urged it to impose tough limits on the operation.
With the deal, Telefonica will become the number one in pay-TV with 3 million subscribers a long way ahead of Vodafone-ONO with 900,000 pay-TV customers, controlling over 80 per cent of all pay-TV revenues. For Vodafone, this may give Telefonica a greater power to negotiate exclusive content contracts at better prices.
Telefonica has doubled the number of subscribers in a year thanks to its new Movistar Fusion offer which includes pay-TV, mobile and fixed telephony and mobile and fixed Internet access at high speed. In July, Movistar TV reached 1.4 million subscribers after signing up 200,000 clients in a single month. In the second quarter of the year, Telefonica added nearly 350,000 pay-TV subscribers with the Fusion service reaching a total of 3.4 million subs, up 55 per cent year-on-year.