Televisa Acquires Full Control of Television Internacional

Mexican TV broadcasting behemoth Grupo Televisa S.A. TV recently acquired the remaining 50% stake in Television Internacional from the Multimedios Group for 6.75 billion Mexican Pesos (approximately $380 million).

In Mar 2006, Televisa had first acquired a 50% stake in Television Internacional, which provides cable television, Internet access, telephony services and bidirectional data transmission in the north-eastern part of Mexico. Only 10 days ago, Televisa received a conditional authorization from Mexican telecom regulator, Federal Telecommunications Institute IFT, for the deal.

In 2014, the government of Mexico had introduced reforms within its telecommunications sector, which included the pay-TV segment as well. The IFT seeks to restrict the maximum hold of a company in the market to 50%. Following the implementation of such stringent measures, Televisa has had to share its broadcast towers with competitors for a stipulated amount of fees. Moreover, the company does not have exclusive broadcasting rights of popular sports and entertainment events such as any world cup tournament.

Televisa currently dominates approximately 70% of the Mexican broadcasting and pay-TV market. The company's goal is to create a North American Spanish language media empire, comprising broadcast, Internet, publishing, and live events. The pay-TV market in Mexico is vastly untapped. Several industry researchers estimate pay-TV penetration in the country at roughly 50%, reflecting a massive opportunity for growth.

Televisa's Cable & Telecom segment, which offers bundled triple-play video, data and telephony services, may become a significant revenue generator. At the end of 2015, Televisa had 4.06 million video customers, 3.07 million broadband subscribers and 1.89 million voice customers. Last month, Television Internacional extended its existing contract with Arris International Plc ARRS to expand its HD (high definition) channel broadcasting using the vendor's Apex 3000 Universal Edge QAM.

Zacks Rank & Stocks to Consider

Televisa currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the space include Media General Inc. MEG and Entercom Communications Corp. ETM. Both the stocks carry a Zacks Rank #2 (Buy).

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