UPDATE:Spain Confirms Tax On Telecoms,TV To Cut Public TV Ads
08 Mai 2009 - 3:34PM
Dow Jones News
Spain's government said Friday it had approved a plan to tax
private TV stations and telecommunications companies to compensate
for phasing out advertising at public station TVE.
The new law will levy a 0.9% tax on the gross revenue of
telecommunications operators and a 3% tax on the gross revenue of
private television stations, Spanish Deputy Prime Minister Maria
Teresa Fernandez de la Vega said in a meeting with journalists.
Spain's free-to-air TV broadcasters, Gestevision Telecinco
(TL5.MC), Antena 3 de Television (A3TV.MC), Promotora de
Informaciones SA's (PRS.MC) Cuatro and La Sexta have come under
pressure as more channels compete for a shrinking amount of TV
advertising as a recession in Spain takes hold.
De la Vega said the changes at TVE would guarantee the channel's
independence and free up a larger part of the advertising pie for
private channels.
Espirito Santo analyst Sandra Sousa said the move would likely
be good for Spain's private TV channels, but the country's
diminishing advertising market could limit the impact of the
changes.
"Advertisers won't necessarily increase what they spend with the
private channels just because they can't advertise on public TV
anymore either," she adedd.
Local telecommunications lobby Redtel lashed out against the
move, and said it would fight the new tax in court both in Spain
and in a European Union court in Brussels.
"The measure is unjust, disproportionate and illegal," Redtel
said in a statement.
Telefonica SA (TEF), Vodafone PLC (VOD) and France Telecom SA
(FTE) are the company's biggest telecom operators and will likely
be most severely affected by the tax.
Redtel said that between the fee they already pay to use radio
spectrum and the new tax, telecom companies could end up paying 50%
of TVE's budget, or EUR600 million annually.
The new legal changes still need parliamentary approval,
although analysts say they are likely to be approved. A TVE labor
union with access to the plan said earlier this week TVE would drop
advertising as of September.
-By Jason Sinclair, Dow Jones Newswires; 34 913958127;
jason.sinclair@dowjones.com