(TV) Grupo Televisa Eyeing Mobile Opportunity

January 12th, 2010

Grupo Televisa SA (TV), the largest media company in the Spanish-speaking world, is likely to enter into the lucrative wireless communications market in Mexico. The company is in negotiation with Vivendi SA of France to form a joint venture. The Mexican government has decided to auction mobile-phone airwaves in the first half of 2010. The joint venture will be a 50-50 partnership between Televisa and Vivendi and will bid for a wireless spectrum in the auction.

Industry sources reported that the new company has decided to invest $3 billion in order to deploy a nationwide wireless network in Mexico. We believe that this joint venture may generate serious threat to the incumbent Mexican mobile giants like America Movil SAB (AMX) and Telefonos de Mexico SAB (TMX). Both these companies are controlled by Mr. Carlos Slim. The Mexican government will also auction two fiber-optic lines owned by Mexico’s state-owned power company, Comision Federal de Electricidad. Televisa has also decided to lead a consortium of telecom service providers to take part in this auction.

Televisa has stake in the three largest cable MSOs in Mexico. The company has already started its own telecom business. On May 9, 2007, the Ministry of Communication and Transportation of Mexico granted Televisa’s subsidiary, Cablevision, a concession to offer fixed telephony services through its network. Cablevision offers digital cable television services, broadband Internet connection and high-definition television services and video-on-demand products. We believe the company’s entry into wireless services business will open up a significant new source of revenue growth in the long run.

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Read more on Grupo Televisa S.A., Investing in Mexico at Wikinvest


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