Mexican broadcaster Televisa will begin to offer mobile phone service as a bid to challenge Carlos Slim’s America Movil, that has long influenced Mexican telecommunications market, the company said yesterday.
Televisa will work as a mobile virtual network operator, or MVNO, and start by providing service to current customers of the company’s cable and home internet packages, which were sold under its Izzi brand, rather than building infrastructure. The broadcaster will hire area on wholesale telecom network in Mexico, operated by Altan Redes.
Televisa initially decided to roll out the service in September, according to an interview of Izzi Chief Executive Salvi Folch. But as cases of the coronavirus started going to the peak, executives sensed the economic turmoil stemming from the virus would make higher demand for low-price phone packages and will now begin the service today.
“The pandemic made us accelerate our plans,” Folch said. “People will have to spend less on some services. … We view it as an opportunity.”
Televisa goes along with in footsteps of U.S. cable companies such as Comcast Corp and Charter Communications Inc that have ventured into the mobile market as MVNOs over the last few years.
Mexico has long battled to boost competition in telecommunications, even passing a constitutional reform in 2013 aimed toward loosening Slim’s grip on the market. Yet global telecoms titans like AT&T and Telefonica have did not meaningfully erode Slim’s market share and America Movil still holds about two-thirds of cell phone lines, as stated by the statistics from Mexican telecom regulator IFT.
Some telecom experts argue the key to promoting competition is to pit America Movil and Televisa, the king of Mexican broadcasting, against one another.
Televisa’s cellular service are priced at 250 pesos per month per line with unlimited data, around 80% cheaper than comparable packages from America Movil, the broadcaster said. The company will offer the phone plans to roughly 3 million households in 17 cities in Mexico.
Televisa may consider extending the service beyond its own clients in the future, Folch said, but beginning with current customers enabled the company to exploit economies of scale. The broadcaster also will save by directing customers to get phones from other vendors, instead of financing devices.
Televisa has struggled in the last few years as broadcasters worldwide grapple with declining viewership. The new offering will reinforce telecom units of the company, which became its largest moneymaker, driving near 70% of net sales in Q1.