Grupo Televisia S.A.
), a dominant force in the Mexican media business has increased
its 2013 capital expenditure plan to $1 billion from $881 million
in 2012 representing an annual increase of 13.51%. Televisia has
allocated majority of its revenue in the cable and
The double-digit increase does not come as a surprise as the
company increased its capital expenditure by 11.38% in 2012.
Televisia has earmarked $565 million for cable and telecom
segment, $300 million for satellite television service and $135
million for content and other business.
Televisia's Cable and telecom segment offers bundled
triple-play video, data, and telephony services and has surpassed
two million phone and internet subscribers for the first time in
fourth quarter of 2012.
Televisia enjoys a monopoly in the Mexican media space and
controls about 70% of the country's broadcasting market with
rival TV Azteca controlling the remaining 30%. The potential for
growth of Spanish language channels and content is enormous and
Televisia intends to capitalize on it.
Additionally, the Pay-TV market in Mexico is vastly untapped
with a penetration of around 43-44% in 2012, thereby reflecting a
massive opportunity for future growth. In the recently concluded
quarter the company's added 270,000 satellite TV subscribers and
at the end of 2012 the company had a total of 5.2 million
However, the company continues to struggle in the wireless
segment as 70% of the Mexican wireless segment is controlled by
America Movil S.A.B.
) and 20% by
). In an attempt to augment its market share Televisia acquired a
50% stake in wireless carrier lusacell in Jun 2012, which
presently controls a 6% of the Mexican telecom market.
The acquisition comes after a failed attempt in 2010 to enter
a into a wireless venture with Nextel de Mexico, a subsidiary of
NII Holdings Inc.
) due to prolonged legal battles.
According to Televisia, lusacell will invest $800 million in
infrastructure deployment over the next three years. We believe,
a portion of the Televisia's proposed $565 million investment for
cable and telecom segment, might be directed towards wireless
network enhancement of lusacell.
Moreover, at the end of 2012 the company had $1,892 million in
cash and marketable securities, which will allow Televisia to
fund its future investments without depending on the debt market.
Currently, Televisia carries a Zacks Rank #3 (Hold).
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