MADRID – Spain’s dominant pay-TV player Sogecable and by far its biggest telco, Telefonica, have joined forces to create a joint venture triple-play package.
Called Trio Plus, the service will offer Sogecable’s digital satellite pay-TV service, Digital Plus, alongside broadband and voice telephony from Telefonica.
Telefonica and Sogecable will also team to acquire new content for Trio Plus services, with Sogecable, which is far more versed in the content bizz, handling acquisitions.
The non-exclusive deal kicks in Nov. 30, when anti-trust regs lapse, which have limited Sogecable and Telefonica from joint ventures in the past. The alliance runs for four years.
Both Sogecable and Telefonica will market Trio Plus to clients.
The two partners still have to clarify issues, such as respective pricing for Telefonica’s IPTV offering Imagenio and Digital Plus, and how they’ll avoid the traditionally lower-priced Imagenio from cannibalizing Digital Plus subs.
Another question is whether Telefonica will merely sell Digital Plus or incorporate it onto its broadband offer.
But for both players, the alliance reps an aggressive defensive move to protect market share in highly competitive markets.
“People will want VOD and two-way services and, unlike cable and IPTV, a satellite operator such as Sogecable can’t provide that,” said Fabian Lares, at Espirito Santo Investment.
With the deal, Sogecable dips a toe in the ADSL bizz, and gains the economic backing of Telefonica.
“Telefonica’s telecommunications future will depend on its broadband share,” said Glen Spencer Chapman, an analyst at Ibersecurities. “Its broadband competitors will always price slightly below its offer. Unable to compete in price, Telefonica has to compete in services.”
Telefonica holds a 16.65% stake in Sogecable.