The Spanish telecommunications infrastructure manager Cellnex must pay the 13.7 million euros that it has provisioned in accounts for the historic sanction of the National Commission of Markets and Competition (CNMC) for abuse of a dominant position in the sector. Digital Terrestrial Television (DTT). The Supreme Court closes the door to a potential reduction or annulment of said resolution, which is why it supports the position adopted by the National Court. This closes a lawsuit that has dragged on for more than a decade due to different resources and the recalculation of the amount.
In an order dated at the end of last November, consulted by La Información, the Contentious Chamber of the Supreme Court understands that there is no cassation interest, since the objective does not have to be “to reproduce once again the debate that was already object of assessment” by the ruling of the National Court at the beginning of the year. The magistrates believe that the latter’s doctrine does not have to affect a large number of situations, something that would justify its pronouncement.
Therefore, it closes the door to this appeal and makes the ruling of the National Court final. In it, the judges argue that the fine was proportional and in accordance with the law. The company, led by Marco Patuano, had previously argued in its appeal that there was a lack of motivation in this decision and that it would incur arbitrariness in the new calculation. None of these arguments were accepted by the Litigation Chamber, which accepted that figure of 13.7 million euros.
It must be remembered that those 13.7 million have already been recalculated and that is the reason why a lawsuit that started after the imposition of the sanction in 2012 is now closed. The Supreme Court forced Competition to redo the procedure by proposing a different criterion to set the fine. That resolution concluded that, really, based on the new criteria, what would be appropriate was to demand the payment of 17.2 million euros (after the adjustment to “ensure proportionality”). Because the revised figure could not be higher than the one initially proposed, it was kept at 13.7 million. That 2019 resolution is the one that now becomes firm.
The other open case linked to DTT is also being analyzed by the High Court. Here the appeal presented by the infrastructure manager was admitted for processing, by calculating the amount based on the group’s total income and not on its activity. That should be the key to the future ruling that the Litigation Chamber puts on the table. On this occasion, the TS has opened up to review the case after a recalculation that reduced the initial penalty from 22.7 to 18.7 million euros. Whatever happens, as is the case with the one that is now firm, it was provisioned in the accounts so it would have no accounting impact.
The DTT signal operation business was originally part of Abertis Telecom, now Cellnex, after taking over the audiovisual business of Retevisión. In the first decade of the 2000s, it carried out the deployment of this DTT in Spain and later became the national coverage operator. This business line has been losing importance in the group due to the technological change and consumption of television. Between January and September, these broadcast infrastructures accounted for revenues of just 173 million euros – slightly up from the previous year – which represents a fraction of the more than 3,000 million globally.
Strategic plan
After closing the first nine months of the year with a sharp reduction in losses by 22% – to below 200 million – and a 17% increase in income, the company has been working for several months on the implementation launch of a new strategic plan for the coming years. A roadmap that would arrive after the change of course that began at the end of 2022 that places priority on financial efficiency and organic growth to reduce leverage. These new pillars will be unveiled in the first part of 2024 at an ‘Investor Day’. “We will strike a balance between growth projects and a new cash return policy with the objective of maximizing the value of our shareholders,” concluded Patuano in the last meeting with analysts.
To try to accelerate this deleveraging, with the objective of recovering the investment grade of the S&P agency, Cellnex has completed the sale of 49% of its Nordic division to Stonepeak ahead of schedule. To this we must add the transaction linked to the Irish subsidiary, whose divestment is being worked on although no agreement has yet been closed. This opening of the capital of its non-main divisions is one of the measures adopted.
