MADRID — Spanish telco giant Telefonica and film and TV conglom Sogecable will merge their pay TV operations, Telefonica-controlled satcaster Via Digital and Sogecable’s premium paybox Canal Plus Espana and digital platform Canal Satelite Digital.

If approved by antitrust authorities, the seismic deal would revolutionize Spain’s film and TV sectors and give Telefonica a 23% stake in Sogecable, matching the stakes held by Spanish media group Prisa and France’s Canal Plus Group, owned by Vivendi Universal.

Telefonica will name Sogecable’s new chairman of the board. Sogecable will buy all of Audiovisual Sport, a sports rights company co-owned by Telefonica and Sogecable.

A merger has always been in the cards in Spain. Analysts maintain the market is simply not big enough to support two major digital platforms.

Powered by Canal Plus Espana, Sogecable saw a small net profit last year. But Via Digital posted full-year net losses of $303.3 million, a number forecast to stay more or less the same this year.

The merger still faces formidable obstacles, such as European Union. antitrust approval and a thumbs-up from Spanish Prime Minister Jose Maria Aznar, a bitter foe of the socialist-friendly Prisa.