Televisa Seeks Alliance with Telefonica

Only a few weeks after Grupo Televisa announced an unprecedented content partnership with Telemundo, the news now is that Mexico’s TV giant is courting Spain’s behemoth Telefónica in a bid to enter the Mexican triple-play market. News reports published late March in Mexico and Spain claim Televisa’s CEO Emilio Azcárraga Jean is “looking for opportunities” to better its position as a telecommunications player.

In an interview with Spain’s financial daily Expansión, Azcárraga Jean said Televisa is now looking to forge alliances with other companies to improve consumer services, and that his company and “didn’t reject an alliance with Telefonica.”

An alliance with Telefónica, say analysts, would turn around Televisa’s face-off with Carlos Slim’s Telmex, which already competes in the lucrative triple-play pay TV, Internet and telephony business. Telmex currently controls over 90% of Mexico’s land lines and is awaiting a government license to get into the Internet pay TV business.

For its part, Televisa is the nation’s largest cable operator, through subsidiaries Cablevisión and its recent acquisition of Cablemás and TVI, which together had 1.5 million subscribers. Televisa also owns satellite pay TV operator Sky Mexico.

According to media analysts, Telefónica needs a cable operator in Mexico such as Televisa to expand its telephone, Internet and pay TV operations in the country. Telefónica’s cell phone operation in Mexico already has over 11 million clients. An alliance with Televisa would give the Spanish company one foot in Mexico’s pay TV market.