Mexico’s Telecommunications Sector

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In terms of market shares, taking into account all the technologies, Grupo Televisa holds approximately 50% of the market share. At the same time, cable television is the dominant technology: two out of three subscriptions are through this technology. In this sub-segment, Televisa, though Cablevision and Cablemas owns 35% of the market, and Megacable, its closest competitor, follows with 31%.

Televisa has a great ability to grow and even though the reforms should increase competition Televisa is well known in the industry and in order for the competition to reach out Televisa’s market share would take a lot of effort, money and time so in our opinion Televisa has all to win in this sector. With the company’s plan to expand and reach out the Hispanic market in the US, televisa is planning to get revenues from other sources that are not derived from the country, which should be beneficial. [pic 1]

Given the diversification on businesses the main income of the company comes from their content, which is the Televisa’s core business.

The Revenue Breakdown includes the company’s sales, which the main revenue comes from the content and 30% of this is derived from advertising, which is one of the main business strategies of the company.[pic 2]

With the changing Mexican Reforms Televisa is forecasting and increase in their main revenue derived from advertising that will grow in a long-term strategy.[pic 3]

Since there will be more competition in the sector Televisa is taking this as an opportunity to new business in order to be more competitive.[pic 4]

Management

- Emilio Azcárraga Jean (President & CEO)

- Alfonso de Angoitia Noriega (Executive Vice President)

- Bernardo Gómez Martínez (Executive Vice President)

- José Antonio Bastón Patiño (President of Television and Contents)

- Salvi Folch Vladero (CFO)

- Ricardo Perez Teuffer (Corporate Vice President of Sales and Marketing)

- Alexandre Penna (CEO of SKY)

- Jean Paul Broc Haro (CEO of Cablevision)

- Juan Pablo del Real (CEO of Bestel)

- Martha Elena Diaz Llanos (International Vice President of Televisa Publishing)

- Javier Ahedo Sol (General Manager Multijuegos)

- Manuel Gliardi (Vice President Digital & New Media)

- Adolfo Lagos (Corporate Vice President of Telecommunications)

STRENGHTS

- Dominant market share on broadcasting TV and Pay TV services

- Established presence in television market

- Diversified media and entertainment businesses

- Significant publishing business

WEAKNESS

- High dependence on Mexico

- Mexico is the primary market in which it operates

- Revenues from Mexico 86.4%

- Revenues from other countries 13.6%

- Country economic risks

- Political instability in the country

OPPORTUNITIES

- Growing Hispanic population in the US

- Growing Pay-Tv market in Latin America

- Strong growth in the Mexican media industry

- Leading media and entertainment company in Mexico

- Growing media advertisement in México

THREATS

- Technological accelerated change

- Intense competition

- Renewal of concessions

- Telecommunication reforms

Industry profile:

The Mexican telecomm industry has been dominated by preponderant agents, in the TV sector Televisa holds that title, having as their main competition Azteca.

However, there are signs that the relationship between Televisa and TV Azteca is not only that of two competitors, but it is also a collaborative and in some cases a collusive one. This is based on the fact that actor’s and producers agreements tend to be exclusive and by doing so the companies can offer lower salaries than the ones that could be offered if there were in open competition. Moreover, there are commercial relationships between them. For example, they make arrangements regarding the broadcasting times of football matches and practice cross advertising (Lajous and Galvez, 2011).

Mexican television companies have high profit margins (29% for Grupo Televisa and 36% for TV Azteca) compared with other countries networks where there is more competition, for example, 10% for CBS in the United States, 8% for ITV network in the UK or 10% for Zee in India. Digital TV conversion[pic 5]

AZTECA

Azteca is one of the two largest producers of Spanish language television programming in the world. Currently it owns and operates two television networks with national coverage in Mexico, Azteca 13 and Azteca 7. Similarly, Project operates 40 cultural channel cut in television.

Azteca also owns Azteca America, the television fastest growing in the United States; Monarcas Morelia and Atlas, first division teams of the Mexican Football Federation and operates Azteca Internet, Internet portal and virtual market for Spanish-speaking users in North America.[pic 6]

TV Azteca is Televisa’s biggest competitor in Broadcast TV services, as in Televisa it is the main business.

Industry analysis:[pic 7]

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Estado de Resultados Azteca 13, 14

Concepto

13