Telefonica weds media stakes, taps commish

Bangemann to consult Spanish telco, film & TV sects merge

By JOHN HOPEWELL

MADRID -- In a move that confirms Telefonica as one of the most bullish media players in Europe, Spanish telco prexy Juan Villalonga announced Wednesday that Telefonica will group its sprawling film and TV interests in an as yet unnamed media company that will then float part of its shares on the Madrid stock exchange.

Villalonga also confirmed that Telefonica has hired EU commissioner Martin Bangemann, regarded as the most important telecommunications politico in Europe, as an external consultant.

Last week Telefonica took a 5% equity stake in U.K. media group Pearson, becoming its single largest shareholder.

Fusing media, Internet interests

According to Villalonga, Telefonica's new media group will integrate all of Telefonica's "distribution, media and contents" assets plus its Internet portal interests. These are likely to include Telefonica's stakes in commercial web Antena 3 TV, satcaster Via Digital and production house Lola Films, all in Spain, plus Telefonica's strategic interests in major cable operators in Latin America (including Argentina's No. 1 MSO Cablevision) and its 30% stake in top Argentine broadcaster Telefe.

Financial consultant J.P. Morgan has been brought in to evaluate such interests. The public flotation will take place "over the next months," Villalonga added.

Bangemann is the acting EU commissioner for industry, information, technology and telecommunications. His role at Telefonica will include convergence strategy and the identification of new products, markets and local partners.

This brief could see Bangemann navigating the marsh of EU competition regulations while he spearheads Telefonica's move into new markets such as Eastern Europe, although Telefonica's pact with Sogecable to share pay-per-view soccer rights may well raise EU antitrust concerns.

(Emiliano de Pablos in Madrid contributed to this report.)