July 29, 2014
Mexico to open first bidding for TV networks
Televisa was considered a ‘preponderant’ market player, while Slim may get into the market
MEXICO CITY — Mexican regulators hit the country’s main television network with a double punch yesterday, declaring Televisa a “preponderant” market player and slapping restrictions on the company, which bills itself as the largest media outlet in the Spanish-speaking world.
Regulators also approved plans to open bidding for two new nationwide TV channels, to foment more competition in an industry where the Televisa network holds about 70 percent of non-cable viewership.
The newly empowered federal telecommunications institute IFT said on Thursday it is working on the bidding guidelines for the new network. Currently, Televisa’s only broadcast TV competitors are several government educational channels and the smaller TV Azteca, a former government network privatized in the 1990s. By midday, Televisa shares were down about 3.4 percent on the news.
Paradoxically for a move aimed at ending market concentration, the decision could open the way for telecom magnate Carlos Slim to get into television. Slim’s America Movil company controls about a 70 percent market share in cellular telephones through its Telcel subsidiary and 80 percent of land lines via its Telmex unit.
Mexico’s telecoms regulator yesterday declared two Slim’s major financial and industrial companies “dominant” in telecommunications, but has yet to slap the tag on Slim’s flagship telecoms company. Mexico is seeking to spur competition in the tight-knit phone and TV industries.
The IFT has deemed Slim’s bank Inbursa and conglomerate Grupo Carso, which both have direct or indirect stakes in America Movil, dominant in telecoms given their “economic interests,” the companies said yesterday.
Both Inbursa and Grupo Carso said they were analyzing the decision and would provide details on the steps they would take in response. Shares of Inbursa were down 0.55 percent, while Grupo Carso was up 0.12 percent.
In a press statement issued yesterday, Televisa said the regulators’ decision requires it to “make its broadcasting infrastructure available to third parties on a non-discriminatory and non-exclusive basis.”
Regulators said Televisa will be barred from buying exclusive rights to broadcast “programmes with unique characteristics that in the past have delivered large audiences on a national or regional basis, such as professional soccer league playoffs, Mexican National team matches, FIFA World Cup finals and Olympic Games,” according to the Televisa statement.
Rogelio Bustamante, a telecommunication expert at the Technological University of Monterrey, said “there is going to be a change in telecom contents and services in Mexico” as a result of the new rules. “We are entering a new phase of more competition.”
Televisa said it was still studying the regulatory decision, which covered more than 600 pages.
The company will have to publish its advertising rates, which have been confidential and highly variable.
Agustin Ramírez, president of the nonprofit Mexican Association for the Right to Information, called the new rules “an important step in regulating highly concentrated markets.”
“The other beneficiary here will obviously be advertising markets... those markets will explode” because of new, transparent policies in selling ad time.
Televisa has been slammed by critics for churning out a decades-long stream of often smarmy soap operas that are nonetheless popular across the world.
That is not likely to change for the moment.
“Simply issuing bidding rules for new television channels, to create more competitors, will not automatically mean better content for audiences,” said Ramírez. But he noted that, apart from Slim, there are other potential operators interested in getting into television, which since its birth in the 1950s in Mexico, has been dominated by Televisa.
“The regulatory authorities themselves say there are at least nine or 10 firms interested in participating in the bidding, and I believe there are,” Ramírez said. “Print media (like newspapers) have been getting involved in distributing audio-visual content by internet.”
Indeed, at least one Mexican print media group, Milenio, has established a cable news channel.
While the TV networks have frequently challenged such regulatory decision in court in the past, their ability to do successfully has been limited under a telecom reform law passed in 2013.
Herald with AP, Reuters