There is nothing that better illustrates Carlos Slim's ambition to muscle into Mexican television than soccer. In December Slim–who owns America Movil, the country's biggest telecommunications firm–watched his new investment, Leon, march to victory in Mexico's national league, defeating America, owned by Emilio Azcarraga, a rival broadcasting mogul.
He was lucky to see the first game of the final. Most Mexicans couldn't. Slim had sold the transmission rights to Fox Sports, not to Azcarraga's Televisa, Mexico's biggest broadcaster. For the first time one game of the two-match final was not shown on nationwide free television.A few months later Dish, a satellite-television company recently revealed to have close ties to Slim, has found a new way of dishing it to Televisa.
"Soccer belongs to everyone," it says, in a schmaltzy advertisement for the upcoming World Cup. "Thanks to (Mexico's) telecommunications reform, you can watch the matches from Brazil on Dish with free-to-air television channels."
Those matches will come courtesy of Televisa, even though the broadcaster has fought tooth and nail to stop Dish from being allowed to retransmit its channels without paying. On February 21 Mexico's new telecommunications regulator, Ifetel, confirmed that it would let Dish and others rebroadcast four national channels belonging to Televisa and TV Azteca, the terrestrial television duopoly, ignoring the broadcasters' complaints that Dish is merely a stalking horse for Slim.
Slim's ambitions in television are controversial for two reasons. First, the 1990 telephone concession that helped make him one of the world's richest men forbade him from broadcasting television, either directly or indirectly. As a result of last year's telecommunications reform, he may now be able to, as long as the regulator approves.
Second, he has an enormous presence in Mexico's telecommunications markets. America Movil controls 80 per cent of fixed-line and 70 per cent of mobile contracts, giving it a massive advantage when it comes to selling Internet access. Although his businesses are exceptionally profitable by global standards, their services are slow and expensive, and their uptake is low even by Latin American standards.
Broadcasting, in contrast, is struggling as advertising revenues fall. Televisa and TV Azteca fear that, if Slim is allowed to invade their market, he will use his massive financial firepower to wipe them out.
Nonsense, Slim's aides say. Televisa too is a behemoth, with a 70 per cent share of terrestrial broadcasting and almost 50 per cent of the pay-television market, including its majority stakes in Sky Mexico and Cablevision. Slim's people argue that Dish has almost halved the cost of pay-television since its launch five years ago, showing the benefits of competition, Consumers will benefit further from Dish and others being free to include Televisa in the bundles of channels it offers them.
Televisa says that this will cost it US$106 million in revenues this year.
The Economist