Televisa to Purchase Half of Cell Phone Company Iusacell

If approved by regulatory officials, the acquisition would mark Televisa's first foray into the wireless telephone business.

Mexico City -- Mexican media giant Televisa has reached an agreement valued at $1.6 billion to purchase a 50% stake in Iusacell, the cell phone company owned by the parent company of rival broadcaster TV Azteca. 

If approved by regulatory officials, the acquisition would mark Televisa's first foray into the wireless telephone business. In a company statement released Thursday, Televisa said it plans to invest $37.5 million in equity and more than $1.5 billion in convertible debt of Isuacell.
 
The move into the mobile phone market would pit Televisa against America Movil, Latin America's largest carrier with 225 million clients. America Movil is owned by Mexican billionaire Carlos Slim, the world's richest man, according to Forbes. Under the agreement, Televisa and Isuacell would share corporate governance rights.
 
In recent months, Mexico's communications oligarchs have been feuding as they encroach on one another's converging markets. Slim's fixed-line telco Telmex is looking to crack the television market, but has been barred from doing so because of competition concerns. In the meantime, Televisa and TV Azteca have been stepping on Telmex's turf as the TV duopoly expands Internet and phone services.
 
If greenlighted, the joint venture is likely to spark more tension in the ongoing telenovela-like drama between Slim and the two broadcasters. Slim has already pulled advertising for his companies on both networks and he has filed an antitrust complaint against Televisa and TV Azteca claiming they are colluding to control ad prices.
 
There's a lot at stake for all parties involved. According to Pyramid Research, total revenues in Mexico's telecom market are estimated to reach $35 billion by 2015, of which two-thirds are expected to come from the mobile phone business. Iusacell currently has only 4 million subscribers, yet with the investment and advertising might behind Televisa, Iusacel could give market leaders America Movil and Spain's Telefonica a run for their money. 
comments powered by Disqus