America Movil (NYSE: AMX), the telecom conglomerate owned by Carlos Slim, is now the dominant pay-TV provider in Latin America, surpassing satellite provider DirecTV (Nasdaq: DTV).
America Movil, indicates a new TeleGeography report, had 11.3 million, or 22 percent, of Latin America's 51 million pay-TV subscribers in the first half of this year, while DirecTV had 9.1 million, or 18 percent, of the market. This is a blow to DirecTV, which had led the region via its direct-to-home operations in the majority of Latin America's key markets, including Brazil, Argentina, Colombia, Venezuela, Chile and Peru.
What helped the conglomerate take the top spot in the segment was its move to wrap all of its Latin American operations, including Telmex, Telmex Internacional and Net Servicos of Brazil, under the America Movil umbrella. This move, said TeleGeography, enabled America Movil to expand its pay-TV subscriber base, which runs mainly on traditional HFC networks.
Not far behind America Movil and DirecTV are three other dominant players: Mexican-based competitor Grupo Televisa, which holds 13 percent of Latin America's TV subscribers; Argentina's Groupo Clarin, with 7 percent of the region's subscribers; and Telefonica (NYSE: TEF), with 5 percent. Also joining the top 10 pay-TV group are a mix of regional cable and satellite providers including MegaCable, Dish Mexico, Liberty Global, Une and Inter.
Although cable and satellite players continue to be the dominant players, traditional telcos, especially America Movil and Telefonica, are making continual headway in the TV market.
"America Movil and Telefonica not only dominate the region's telecoms market, but they now also account for a combined 27% of the pay-TV market," said John Dinsdale, managing director at Synergy Research and TeleGeography analyst.
Dinsdale added that "while IPTV is still underdeveloped in the region, Latin American telcos in aggregate have seen their IPTV subscriber base increase by 105% over the last year."
The challenge for any telco that's up and coming in the pay-TV business, as seen in the U.S. market, is being able to strike content deals to have the right mix of programming to compete with well-embedded cable and satellite players. However, in the case of America Movil and Telefonica, which both have strong positions already in the pay-TV market, content acquisition is just another task on their checklists to expand their video service presence.
Image source: TeleGeography
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