TELECOMS: Spain’s Telefonica Wins Decisive Battle in Digital War

By Tito Drago Reprint | | Print |

Tito Drago

MADRID, Jul 24 1997 (IPS) - Spain’s Telefónica company won an important, and maybe decisive battle in the digital television war it is fighting with the Prisa group – owners of the “El Pais” newspaper, Thursday.

The confrontation was sparked by the dispute over the new digital television services – a sector of the audiovisual market expected to become a leading area of the desirable telecommunications sector world-wide over the next few years.

Telefonica said Thursday it had acquired 25 percent of the actions of the private television channel Antena 3TV from the entrepreneur, Antonio Asensio, who had been working on the launch of a Digital Satelite Channel with the Prisa group up to Wednesday.

He also sold Telefonica 51 percent of shares in his audiovisual media company, a group which holds transmission rights over 27 football teams, including some of the biggest crowd pullers in the nation.

Management of the recently privatised Telefonica is still dominated by the State and the situation with Prisa, the group which controls Canal Plus – the only subscription channel in Spain, supported by Asensio and other minor groups.

Just when it seemed as though Telefonica had won, the Prisa group and Asensio came up with an agreement for the joint management of football rights, on December 24.

This turned the tables on Telefonica, as football is by far the biggest sector of business for the many digital television channels.

However, Jose Maria Aznar’s government thought the Prisa and Asensio pact threatened free competition and sent an urgent bill to parliament.

The law passed decreed all important national sporting events should be broadcast on open television at no extra cost for television viewers.

And this measure, which caused controversy with the European Union (EU) authorities, invalidated the contracts signed by Asencio and Prisa.

On Thursday, Asencio changed sides again, while the nation was still awaiting the EU verdict, fostering plans of going to the European Court if the outcome should go against them.

Prisa’s chief executive and founding director of El Pais, Juan Luis Cebrian, came down hard on the action.

“This is another incident of government interference in the media, through a personal friend of the president,” he said, referring to the life-long link between Aznar and Telefonica president, Juan Villalonga.

Secretary General of the opposition Spanish Socialist Worker’s Party (PSOE), Joaquin Almunia, said this was an operation to serve the private interests of Aznar and the governing Popular Party.

The PSOE backed the Prisa group at all vice versa, through the Canal Plus, El Pais and Cadena Ser – the biggest private radio broadcaster in Spain.

Almunia added his party would be going to the European Competition Tribunal, considering the agreement threatened the anti-monopoly laws.

Government spokesman, Miguel Angel Rodriguez, rejected the accusations in a press conference discussing the political nature of the agreement.

He stressed the deal had been struck as a purely commercial issue, and nothing more, an argument supported by the Telefonica declaration Thursday that it made 650 million dollars from Antena 3TV rights even without counting the football rights.