Televisia Unveils 2013 Capex Plan

Zacks

Grupo Televisia S.A. (TV), 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 telecommunication business.

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 subscribers.

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. (AMX) and 20% by Telefonica S.A. (TEF). 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. (NIHD) 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).

Read the Full Research Report on TV

Read the Full Research Report on TEF

Read the Full Research Report on AMX

Read the Full Research Report on NIHD

Zacks Investment Research



More From Zacks.com
View Comments (0)