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Televisa closes Iucasell stake sale, acquires Telecable

The Mexican regulator seemed keep to get this deal through

Mexican broadcaster Grupo Televisa has acquired telco firm Telecable, the trading name of Cablevision Red, for MXN3 billion. Coinciding with the acquisition, the conglomerate also announced the closing of the sale of its 50% stake in Iucasell to the operator’s other owner Grupo Salinas.

Cable TV, telephony and internet services provider Telecable has almost 650,000 subscribers, and Televisa said it expects it to turnover approximately MXN2 billion with an EBITDA of MXN1 billion this year. However, in buying the firm Televisa also forked out MXN7.2 billion to acquire its debt.

“Through this acquisition, Televisa reiterates its confidence in Mexico and in the telecommunications sector and continues to pursue its strategy to establish a telecommunications company with national coverage that delivers more and better services through state of the art technology and internationally competitive prices for the benefit of end-users,” Televisa said in a press release.

The development represents further consolidation in the Mexican market, where M&A activities have been brewing since the country’s telecoms competition rules were tightened last year. The news follows December’s confirmation the Mexican regulator approved AT&T’s proposed purchase of Iucasell, the country’s third largest operator.

Meanwhile in other Mexican telecoms news, it has been reported Carlos Slim’s mobile and fixed-line operator América Móvil is to spin off a holding company known as Sercotel. The purpose of this seems to be to transfer América Móvil’s wireless and wireline assets into a separate subsidiary to avoid regulatory crack-down.

As the dominant telco in Mexico with an estimated market share somewhere around 70%, América Móvil has been taking steps to slim-down on its assets since tougher regulatory rules were put in place last year. According to the new competition laws, no telco can have over 50% share of the country’s market.

Perhaps as a sign the Federal Institute of Telecommunications (IFT), the country’s regulator, really is taking things more seriously now, Dish Mexico has reportedly been fined MXN43 million for a partnership agreement the TV operator has with América Móvil. The IFT has deemed the agreement to be an unauthorised one and has also fined the other party, Telmex (which is part of América Móvil) by MXN14.4 million. Telmex has denied any wrongdoing saying it will appeal the decision.

The whole saga began from Televisa’s complaint to the IFT that Telmex is in a breach of a regulatory ban on it to provide TV services. According to Televisa, Telmex has violated the rule by forming an agreement with Dish Mexico, under which satellite TV services are offered to Telmex’s phone and broadband customers.

Looking at the ownership structures and collaboration deals within the Mexican telecoms sector, it seems like a bit of a labyrinth but one where  many routes still lead back to Carlos Slim. Although tightening regulation and thus opening up the market for foreign investment should shake-up the Mexican telecoms market nicely, it looks like the IFT still has some work to do.


One comment

  1. David 26/01/2016 @ 1:59 am

    Now Telecable is down all over Puerto Vallarta. Their service phones are down. Their online services are down.

    Is this a strike? Is this a massive management change over failure?

    Only the cowards know the truth and they are too afraid to talk about their intentions. Cowardly little baby men.

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