Televisa to modify its business model for mobile
Iñaki Ferreras ©RapidTVNews | 09-02-2012
Grupo Televisa SAB, the world’s largest Spanish-language broadcaster, must modify its business model to win approval for plans to take a 50% stake in Mexican wireless carrier Grupo Iusacell SA.
In rejecting the deal based on Televia’s original proposition, the country’s antitrust agency said that the $1.6 billion deal would create “grave risks” for competition. Iusacell is owned by billionaire Ricardo Salinas, who controls TV Azteca SAB, Televisa’s main rival in the broadcast television market. Televisa already controls three of Mexico’s largest cable operators and its biggest satellite-TV company. Iusacell started a pay-TV service, Totalplay, last year.
Televisa and Iusacell are planning legal filings to ask the agency to reconsider its decision and may likely propose remedies to address the agency’s concerns in the filings. Neither company proposed such remedies in their original request for approval of the transaction, the agency said.
“Televisa would like to reiterate that the intent of its proposal is to promote competition in the phone industry so users have better prices and services,” Televisa said in a statement. “Televisa is in favour of competition in all markets, and for that reason the viable options are being analysed.”
Allowing Televisa to buy half of Iusacell would have created an incentive for the controlling shareholders to collaborate in broadcast television, the agency said. The companies attract almost all of Mexico’s broadcast viewers.
Advertisers currently spend 57% of their budgets in Mexico on broadcast television, so prices in that market affect the prices of products for consumers, the agency concluded. In addition, broadcast television channels represent more than 40% of the pay-TV audience, so the “probable coordination” between Televisa and TV Azteca would allow the companies to use their programming, such as Mexican football league games, as an advantage over competitors in the pay-TV business, the competition agency said.
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