Spain’s new administration has, as reported briefly, announced a decree law as a result of which the state-owned television transmitter operator Retevision will receive a license to offer speech telephony from the beginning of 1997. Full deregulation planned for January 1 1998, when cable companies will also be able to offer basic telephony service, is not far off, but first there will be a transition period during which Telefonica de Espana SA’s monopoly in this particular business segment will give way to a duopoly. The second telecommunications license forms part of a package of measures approved by the cabinet, whose aim, according to the Minister of Public Works Rafael Salgado, is to favor investment, bring down costs and leave the Spanish companies well-placed by the time that full liberalization arrives. Plans to build up a second operator on the basis of Retevision are not new, since this was also the formula considered by the previous government. There are, however, some variations in the modus operandi, in as much as the outgoing government had targeted Retevision’s subsidiary Optel as the starting-point for the operation; this had encouraged a number of electricity companies led by Endesa and Union Fenosa to take a 40% stake in Optel. Salgado has now announced that Optel will be dissolved and Retevision will buy back the shares from the electric companies. In place of Optel, Retevision will create a new public limited company, which will then seek the financial support of domestic private capital through a competitive process. Only private investors that already have stakes in Telefonica, such as La Caixa and Banco Bilbao Vizcaya for example, will be excluded from the process in order to encourage competition, Salgado explained. It was not made clear how big a stake foreign investors will be permitted to take, but according to the decree law the contribution to be made to the national economy by each bidder will be a prior consideration. There is, nevertheless, speculation that the LOT, the law regulating telecommunications, will be reformed to increase the maximum percentage of foreign capital permitted in an operator in this sector, currently 25%. It is foreseen that the state will maintain a stake of around 20% in the new firm, more or less the size of the stake it currently has in Telefonica, while observers believe the private capital could come from the likes of Banco de Santander, Banco Central Hispano, the afore-mentioned electric companies, Cable & Wireless Plc, cellular operator Airtel SA and television channel Antena 3. The government has also specified that since Retevision will not have sufficient time to build up its own telephony network, it will be authorized to use Telefonica’s existing network and will have to pay only the corresponding maintenance costs. Paradoxically, Retevision will continue to maintain its monopoly of television transmission until 1999, a fact not unnoticed by some dissenting voices within Telefonica who have referred to the asymmetrical nature of the decree law. For its part, Retevision took the opportunity to air its results for 1995, with revenue of $253.3m and net profits up 40% at $23m. Salgado also said that within the next three months the government intends to appoint an independent telecommunications regulatory authority, to be known as the Telecommunications Market Commission, a body of highly qualified specialists that will enjoy a high degree of autonomy, he asserted.
