Coming Next: Mexico to tender 2 D-TV broadcasting networks

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Last December 20, 2013, the IFT, Telecom regulator, published the tender program for two TV broadcasting networks with the location of the TV stations and frequencies to be granted under license. The call is expected by March.

IFT acknowledges that commercial free-to-air TV (FTV) has a high concentration with Grupo Televisa (GTV) and TelevisiĆ³n Azteca (TVA), which jointly have, directly or indirectly, 95% of the licenses, 96% of the audience and 99% of the advertising incomes. As a consequence, the tender will prevent companies with 12 MHz in any locality to participate.

The program is set to tender 246 localities/frequencies throughout Mexico for Digital FTV service. However, any interested party could request additional localities or frequencies by January 18, 2014.

Public tenders are pitches to the market. FTV in Mexico is a very hard project to pitch due to concentration. There is not an easy elevator speech for that. On first sight, the entrant conditions of FTV seem hard. However, some factors could diminish that power:

1. Participants could ask adding locations and frequencies. This means that entrants can design its own network architecture for deploying at low cost or preparing for providing additional services.

2. IFT is in process of determining relevant operators for FTV markets. As a result, relevant players who have more than 50% of a given market could be forced to share its passive infrastructure. This could bring down deploy cost for entrants.

3. New networks are set for providing D-TV. However, the licensor could provide any new service, as long as it complies with FTV services. Broadcasting has always been the hard node to interconnect in Mexico. Most of the time because of isolating regulation. Maybe it is time to leave legacy technology behind and mix it with some IP, double screen marketing, interactive systems, VOD, big data mining, and many other models that could make FTV profitable.

4. IFT launched last month, a public consultation on must-carry and must-offer rules, which soon will be in force. Under those obligations, signal of FTV will be repeated into CATV systems, including advertising. This is an automatic upgrade to any infrastructure of FTV network for free, which could bring on more value to sponsors.

5. Operators having broadcasting licenses accumulating 12 MHz or more in a given locality are not elegible for participating into the tender. Under a legal definition of the current Radio and TV Law, broadcasting includes both TV and radio. Technically, this is restricting radio and/or TV groups in Mexico. Also, it does not impose restrictions to participants for bidding on both new networks for the moment.

There are many other factors to consider for assessing whether this tender has real market value. Who knows? Maybe the TV revolution will be televised after all.

Topics:  Mexico, Telecommunications, Television Broadcast Stations

Published In: Communications & Media Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Alberto Esenaro, Alberto Esenaro | Attorney Advertising

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