Televisa upgrading Mexico City cable

Cablevision CEO announces $170 mil broadband investment

MEXICO CITY — Mexican media conglom Televisa will launch a $170 million broadband upgrade of its cabler Cablevision, chairman and CEO Emilio Azcarraga Jean said.

In a rare meeting with a small group of foreign journalists, Azcarraga Jean said Televisa has $70 million on hand to invest in the Mexico City system, which currently has more than 450,000 subs.

The remaining coin will either be provided by Motorola, which will supply the digital set-top boxes, Azcarraga Jean said, or Televisa will raise it by selling shares in the cabler’s upcoming initial public stock offering.

Slim public interest

Cablevision is 51% owned by Televisa and 49% by Mexico’s dominant telco Telefonos de Mexico (Telmex), which is controlled by billionaire businessman Carlos Slim. Under regulatory pressure, Telmex is planning on selling a 24% stake via a public stock offering next month, for which the road show is scheduled to start April 24.

Televisa intends to buy up smaller cablers in other parts of Mexico to create a national broadband network, Azcarraga Jean said.

Mexican cable penetration is quite low, only in an estimated 15% of TV households. However, with lots of small operators — many of which are short on cash — the industry is ripe for consolidation.

Televisa will use the broadband network to deliver its new Internet service in which it is separately investing $80 million. Esmas.com, a Latino portal, is skedded to bow April 30.

Web outreach

Esmas will face competish in Mexico from local and regional ‘Net players such as Slim’s Prodigy, Yahoo!, Terra, StarMedia and TV Azteca’s Todito.com, as well as Slim’s latest venture T1msn.com, his Internet alliance with Microsoft. Seeking to broaden its multimedia approach, Azcarraga Jean said Televisa is planning to offer ad time to Internet sites in exchange for equity stakes, a strategy that has been employed by U.S. Hispanic net Telemundo.

Satcaster Sky Mexico, majority owned and operated by Televisa, is expected to add an interactive component this year. The loss-making operation has 450,000 subs right now, Azcarraga said, but should reach its break-even target of 550,000 subs by year’s end.

(Mary Sutter in Miami contributed to this report.)

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