Mexico's Televisa Focuses 2016 Investment on Cable, Telecom
February 26 2016 - 2:10PM
Dow Jones News
MEXICO CITY—Mexican broadcast and media company Grupo Televisa
SAB plans to make capital expenditures this year of about $1.6
billion, with the lion's share going to bolster its fast-growing
cable and telecommunications business, Executive Vice President
Alfonso de Angoitia said Friday.
Amounts this year will be similar to those of 2015, when
Televisa invested almost $1.1 billion in cable and telecom, the
official told analysts in a conference call.
"We're in a very heavy capex cycle at this point in time. We
will be seeing a reduction in the following years, but this will be
the most heavy year of them all I believe," he added.
While sales at Televisa's content division slipped 1.5% last
year, including a nearly 10% drop in broadcast advertising revenue,
cable and telecommunications revenue jumped 36% and satellite
television sales were 10% higher.
Aside from 7.2 million satellite television subscribers,
Televisa ended last year with 4.1 million cable TV subscribers and
close to 5 million subscribers to its broadband and voice
services.
The company has shelved for now plans to add mobile to the mix
following a foray into that market with a 50% stake in carrier
Iusacell. Televisa sold that stake at a loss after several years.
Iusacell has since been acquired by AT&T Inc.
"We're not planning to enter into the mobile business. We're
focusing on the businesses that we have today, which have
double-digit growth," Mr. De Angoitia said.
Last year's decline in broadcast advertising revenue was largely
the result of Televisa's efforts to raise rates, which met with
some resistance from customers. Broadcast advertising accounted for
26% of total revenue last year, down from 32% in 2014.
José Baston, president of television and content, said upfront
advertising sales for 2016 were down just 1.5%, which he considered
encouraging.
"Prices were up and volumes were down in the upfront. Clients
took the increase in the prices and were being more conservative in
volume," he said. Most advertisers continued with the broadcaster
this year.
Televisa, the world's biggest producer of Spanish-language
television content, this week launched streaming video service
"blim" to compete with Netflix Inc. and America Movil's Clarovideo
service. The service will have about 70% Spanish content, including
Televisa and third-party productions. The rest will be English, Mr.
Bastó n said.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
February 26, 2016 13:55 ET (18:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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