In the face of the pending closure of local digital terrestrial pay TV platform Quiero TV, rumors have flared once again in Spain that rival digital satellite platform owners Telefonica and Grupo Prisa are courting a fusion between Via Digital and Canal Satelite Digital (CSD).

Insiders say that Spain's conservative government, considered to have close ties to formerly public telecoms conglom Telefonica and its TV holdings Via Digital and Antena 3, may begin to look favourably on the idea of a merger in the wake of the Quiero crisis.

As early as last year local pundits were predicting a 'domino effect' on the pay TV sector brought about by Quiero's closure. But even before then a fusion was long anticipated considering the limitations of the Spanish market. Both platforms lose money: Telefonica media filial Admira posted Euros 347.3m in losses last year, while CSD lost Euros 26m in 2001. Their recent cost-cutting efforts have gravely affected local film production and distribution.

A spokesperson for Admira suggests that a merger is never out of the question, 'especially now,' considering Quiero's closure and 'what's happening with pay TV across Europe.' However he insists 'there's nothing tangible' at the moment.