Mexico City– Mexico’s no. 1 broadcaster Televisa announced late Friday that the world’s richest man was pulling his ad dollars, potentially costing the web tens of millions per month.
According to Televisa veep Alfonso de Angoitia, the loss of business generated by ad sales to companies owned by Mexican billionaire Carlos Slim is shrinking revenue for it core broadcasting business by 4%.
The announcement came a day after Televisa reported its Q4 2010 earnings, which showed profit more than doubling in the quarter with net income up 181.8% to 2.62bn pesos ($213 million) over Q4 2009’s $97 million.
De Angoitia detailed that Slim’s companies produced 3.8% of the network’s over-the-air sales and 1.5% of its consolidated income.
While Telmex told a reporter with the Wall Street Journal that the pull-out was related to a disagreement over rates, analysts and Televisa sources are hinting that the move was a counterattack in an escalating feud surrounding Telmex’s delayed entry into the potentially lucrative triple-play market.
The move conveniently came only days after Televisa issued a formal complaint to the Federal Competition Commission (CFC) alleging that Telmex was breaking the law in its dealings with low-cost satcaster Dish Network.
Telmex insists it is merely provides marketing and billing for Dish services. However, Televisa contends Telmex is investing heavily into Dish and have in fact become a partner, making Telmex a de facto operator of the feevee, which would be breaking the law.
Telmex is still not licensed to enter the television market.
For several years, Telmex has been making every effort to gain regulatory clearance to enter the triple-play game, adding TV distribution to its Internet and voice services.
However, needed approvals still languish in bureaucratic limbo.
Meanwhile, Televisa has had clearance since 2007 to run triple-play plans via its cablers, which now include Cablevision, Cablemas and TVI.
In May 2009, the conglom launched the low-cost triple-play plan dubbed Yoo in a synchronized campaign with all the major cablers in the country. The highly successful program has been steadily bleeding customers away from Telmex, dealing a hard blow to the telcom’s bottom line in recent years.