| | |  Business News | October 2009 
Mexico's Televisa to Bid on Wireless
 Cyntia Barrera Diaz - Reuters
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October 26, 2009
Mexico City - Mexican broadcaster Televisa expects planned tax increases in Mexico to hit profits, but still plans to bid in a long-awaited spectrum auction to develop a wireless phone network in the country.
Mexico's lower house of Congress this week passed a watered-down version of President Felipe Calderon's tax reform proposal.
Senators are now revising the plan to raise a value- added tax, along with levies on beer, telecommunications, gaming and high income earners.
"If approved by the Mexican Senate, these new taxes, and increases on current taxes, will have a material negative impact on our company and its subsidiaries," Televisa's Executive Vice President Alfonso de Angoitia told analysts during a conference call on Friday.
Televisa, the world's biggest producer of Spanish-language content, offers television, Internet and telephone packages using its broadband network.
In addition to offering the above, it wants to add wireless communications to the mix.
It also operates dozens of bingo halls across the country.
The company, famous for its tear-jerker soap operas, is waiting for the publication of rules governing a planned auction of wireless spectrum that the government hopes will boost competition in Mexico's telecommunications market.
"We are open to participate in the spectrum auctions, also jointly with already established wireless operators," De Angoitia said.
"We are also in discussions with experienced international players," he added without mentioning names.
BRANCHING OUT
Televisa has expanded outside its core broadcast television business in recent years to boost revenue and remain relevant in a changing market where customers increasingly favor exclusive TV content and access to the Internet.
The company's recent bets on cable and satellite television have proved successful.
However, rising competition has forced it to rethink marketing strategies.
The arrival last year of smaller rival Dish was a particularly strong blow to Televisa's pay television units.
Dish, with its super cheap, no-frills satellite TV offer, hopes to end its first year of operations with 1 million customers.
In what analysts read as a counter move, Televisa's cable companies teamed up with Guadalajara-based Megacable this year.
It now offers a very affordable TV, Internet and phone bundle aimed at low-income earners.
A few weeks ago, its SKY direct-to-home unit introduced a $12.50 package - VeTV - to compete directly against Dish's lowest offer.
Televisa's customers from its three cable companies totaled 1.7 million at the end of September.
Its SKY ended the third quarter with 1.8 million subscribers.
Asked whether Televisa was interested in buying Megacable, De Angoitia said: "We are not looking in terms of consolidating, or buying, or doing something with that company in the short term.
"However, something could happen in the mid to long term."
Televisa has been sitting on a cash pile for several quarters now and analysts wonder when it will use it for an acquisition.
The company has granted extraordinary dividends to shareholders in the past when it has not found something attractive to buy.
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