Televisa follows in the footsteps of American cable companies such as Comcast Corp and Charter Communications Inc
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Mexican broadcaster Televisa said Sunday it will begin offering mobile phone services, an attempt to challenge America Movil for billionaire Carlos Slim, who has long dominated the country’s telecommunications market.
Instead of building infrastructure, Televisa will operate as a Virtual Mobile Operator, or OMV, and will begin by offering service to existing customers of its cable and internet packages for the home, sold under its Izzi brand. The station will rent space on Mexico’s shared telecommunications network, operated by Altán Redes.
Televisa originally planned to implement the service in September, Izzi CEO Salvi Folch said in an interview. But as coronavirus cases increased, executives felt the economic crisis stemming from the disease would create increased demand for low-priced phone packages and will now launch the service on Monday.
“The pandemic made us speed up the plans,” Folch said. “(Some of our clients) are going to have to spend less on some services … We see it as an opportunity,” he added.
Televisa follows in the footsteps of American cable companies like Comcast Corp and Charter Communications Inc that have ventured into the mobile market like OMV in recent years.
Mexico has long struggled to promote competition in telecommunications, including passing a constitutional reform in 2013 aimed at loosening Slim’s grip on the market.
However, global telecommunications titans like AT&T and Telefónica have not managed to significantly erode Slim’s market share and América Móvil still has around two thirds of mobile telephony lines, according to statistics from Mexican telecoms regulator IFT.
Some industry experts argue that the key to boosting competition is to face América Móvil and Televisa, the king of Mexican broadcasting.
Televisa’s cellular service will be priced at 250 pesos a month (about $ 11.2) per line with unlimited data, about 80% cheaper than comparable América Móvil packages, the station said. The company will offer phone plans to approximately 3 million homes in 17 Mexican cities.
Televisa may consider expanding the service beyond its own clients in the future, Folch said, but starting with existing users will allow the company to capitalize on economies of scale.
The station will also save by directing customers to buy phones from other providers, rather than financing devices.
The company has struggled in recent years as broadcasters around the world struggle with declining viewership. The new offering will strengthen the firm’s telecommunications units, which have become its largest provider of money, generating nearly 70% of net sales in the first quarter.
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