Telefónica could abandon Canal+ acquisition over content restrictions

Telefónica could abort its acquisition of pay TV service Canal+ if the country’s competition regulator forces it to sell its content packages to third-party operators at regulated prices, according to Spanish press reports.

According to a Europa Press report, citing sources familiar with the process, the telco has set out red lines that could trigger an abandoning of the acquisition if they were to be crossed by the competition regulator, the CNMC.

The regulator opened a second phase in its investigation of the deal in November amid concerns that the acquisition of Prisa’s 56% in Canal+ could give Telefónica a dominant position in both the pay TV market and the acquisition of content.

According to the sources cited by Europa Press, Telefónica is not willing to submit to selling its packages at regulated prices, although it is willing to discuss sharing some content at profitable rates.

Spain’s previous competition regulator, the CNC, in 2010 forced Canal+ to make a proportion of the channels in its offering available to third-party players as a condition for Telefónica and Mediaset Spain’s respective acquisitions of 22% in the operator.

Telefónica is currently at loggerheads with the CNMC over proposals to force it to open up its fibre network to rivals in all but nine key cities across the country.