Italy needs to understand that bilateral transactions require balance

Paul Betts

Silvio Berlusconi may have been under political fire at home, but his appetite to expand his television empire in Spain has not decreased. His television company Mediaset already operates one of the leading Spanish free digital TV networks – Telecinco. Italians are unwilling to settle more permanently in Spain by Telecinco unification with free digital channel Cuatro, owned by Spanish media company Spanish Prisa.
It is also stated that Mediaset is interested in acquiring a paid satellite TV platform Digital +, also owned by Prisa. The Spanish company has declared its paid television business for sale as part of a program for release of assets to reduce heavy debts.
Until recently, the Spanish telecom Telefónica in partnership with French conglomerate Vivendi was considered a leading candidate for the purchase of Digital +. However, the partners have declined because of the stunning € 2,2 billion requested by Prisa, say bankers. Prisa may need to reduce the price that many considered too conceited if you still wants to sell his paid television. Became clear that, in turn, the Italians have offered compensation for Telefónica. In exchange for the withdrawal of Spanish telecom operator from bidding for Digital +, Italy will enable Telefónica to manage the large share holding in Telco, which controls Telecom Italia.
Telefónica acquired such participation 2 years ago when the unexpected re-invest part of their profits from the sale of the division of O2 in a strategic share in leading Italian telecom. Many had expected this move to be a first step or a merger between Telecom Italia and Telefónica, or takeover of the Italian telecom operator by the Spaniards.
Telefónica however met strong political resistance in Italy. Last year, Berlusconi said that Telecom Italia should not fall into foreign hands. Italian Minister of Communications stated that the share of Telefónica in Telecom Italia is connected problem. “ There were suggestions that Berlusconi holding company Fininvest is interested in purchasing a stake in Telco.
If one week is a long time in politics, one year is an eternity, especially in Italy. In all cases, Telefónica has no intention to withdraw from Italy and considers its stake in Telecom Italia for long term investment. This may not like some of the main investors in Telecom Italia and certain politicians. But we must remember that in any healthy bilateral relationship between the European or, as is the case, the Mediterranean partners should have a fair balance in cross-border industrial transactions, and history of relations between Italy and Spain are somewhat one-sided. Eventually, the Italians came and devoured in Spain’s leading energy company Endesa, which Madrid could have considered more crucial for the national interest in Telecom Italia. For its part, the Italians have blocked attempts by a Spanish company to merge with the leading Italian motorway holding and systematic attempts to prevent the big Spanish banks to expand in Italy.
At least, that the Italians can do is to not speak on the occasion of Telefónica, whether Berlusconi will receive Spanish TV his assets or not.