TelefÃ³nica and France's Vivendi are discussing a joint bid for Digital Plus, the satellite pay-TV business. Its owner, Spanish media group Prisa, is selling it to reduce debt. Prisa set a deadline for bids two weeks ago.
However, Prisa hasn't received any binding bids and informal proposals have fallen well short of the more than â‚¬3 billion it hoped for. BSkyB, the UK pay-TV company, has withdrawn from the proceedings and Mediaset, the Italian media group, looks likely to do the same.
TelefÃ³nica already has an paid for IPTV service, Imagenio. Some executives are arguing that Digital Plus' 2 million satellite subscribers, would complement this, according to the Financial Times.
The report says a tie-up between TelefÃ³nica and Digital Plus would put more pressure on Ono, Spain's other pay-TV company with its own network. Ono is controlled by a private equity consortium. It has seemingly endless management problems and is hard hit by the downturn.