Is Pay-TV a Possibility for America Movil in Mexico?



Pay-TV in Latin America

In Latin American countries, telecom operators have shown evidence of the successful cross-selling of Pay-TV products to fixed-line subscribers. However, America Movil (AMX) is not yet allowed to replicate this strategy in Mexico, but there may be a possibility that regulator IFT (Instituto Federal de Telecomunicaciones) may finally allow it this long-awaited service.

Pay-TV would give America Movil exposure to a fast-growing market, especially as its telecom business stalls in Mexico. The Pay-TV market may be strategically important for America Movil and should help it control churn at its fixed-line division and to compete more efficiently.

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AT&T is a leading player in the US pay-TV market

Through its DIRECTV acquisition, AT&T (T) has become the leading Pay-TV player in the US, as seen in the above chart. After this deal, AT&T’s Pay-TV subscriber base in the US reached 25.3 million, surpassing Comcast’s (CMCSA) subscriber base. Comcast stood second at 22.4 million pay-TV subscribers. Charter (CHTR) is ranked third, with 16.9 million pay-TV subscribers.

AT&T gained 323,000 satellite video subscribers, but lost 326,000 U-Verse video subscribers in 3Q16, which highlights the structural decline that the US pay-TV market is going through. In Latin America, DIRECTV lost 48,000 video subscribers in 3Q16, driven by declines in Colombia, Argentina, and Brazil. DIRECTV’s subscriber base in Latin America reached 12.5 million at the end of 3Q16.


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