Telefónica-Canal Plus takeover approved
April 24, 2015
From David Del Valle in Madrid
The acquisition by Telefónica of a 56 per cent stake in pay-TV platform Canal Plus has been approved by Spanish competition authority CNMC, albeit with several conditions.
Telefónica will have to open up 50 per cent of its premium TV content to other operators with exclusive TV rights to sports (football) and cinema and TV series being reduced from three to two years duration. This will affect Telefónica’s contracts with the big six US majors: Warner, Disney, Sony, Paramount, Fox and Universal.
The CNMC will oversee the price that Telefónica will charge its rivals to have access to its premium TV content and TV channels. In addition, Telefónica is requested not to hinder the switch from its clients to another company and to process as quickly as possible the cancellation of subscriptions when requested in a period of 15 days as maximum.
Both Vodafone and Orange regard these conditions as insufficient, warning that with the takeover competition in the pay TV market will get distorted.
With the go-ahead, Canal Plus is now entirely owned by Telefónica, which becomes a pay-TV giant with over 3.4 million subscribers, taking 85 per cent of the pay-TV market in terms of revenues and 70 per cent of for pay-TV subscribers. Canal Plus will receive €725 million, €24 million less than the initial agreed amount following the devaluation of the company.
Over recent months, Canal Plus has been losing an average of 1,000 subscribers a month, according to financial regulatory agency CNMV, ending 2014 with 1,549,511, down half a million in comparison with the year 2009 when the company set a record with over 2 million pay TV clients. By contrast, Telefónica’s Movistar TV ended the year with 1,881,457 subscribers. In terms of ARPU, in the first quarter of 2015, as for Canal Plus it stood at €41.3, down on €43.5 in the same period last year.