Telefonica, Grupo Televisa exploring tie-up options

24 Sep 2014

Spanish telecoms giant Telefonica is considering a range of tie-up options with Mexican broadcaster Grupo Televisa, including the possibility of creating a new telecoms business together, Reuters reports, citing a person with knowledge of the matter. Telefonica, which currently owns Movistar, Mexico’s second largest mobile operator by subscribers, is keen to secure a tie-up with Televisa’s cableco assets, which include Cablevision, Cablemas and TVI. Last month Televisa paid MXN8.55 billion (USD654 million) to acquire the remainder of shares in triple-play cable network operator Cablecom that it did not already own, but it is believed that Cablecom will be excluded from any deal with Telefonica. Although a larger partnership is anticipated, the idea of Televisa launching as a mobile virtual network operator (MVNO) on Movistar’s network is also an option. The company insider told Reuters: ‘This idea is in play … It could take lots of different forms.’

TeleGeography notes that Grupo Televisa agreed to sell its 50% equity stake in mobile provider Iusacell to Grupo Salinas earlier this month, and this disposal arguably eliminates one of the major potential anti-trust hurdles if a deal with Telefonica does gain traction. The landscape of the Mexican telecoms sector is poised to shift dramatically in the coming months, with a whole host of international investors, including US-based AT&T Inc and Softbank Corp of Japan, said to be interested in acquiring the east coast assets of America Movil’s (AM’s) Telmex and Telcel units. In addition, Softbank has been strongly linked with an investment in another Mexican cellco, namely Iusacell.