As expected, Mexican telecom operators are showing tough love

As expected, Mexican telecom operators are showing tough love

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a phone in love #<3 #bychance #haphazard by Franz Schuier

IFT started a process to declare which telecom operators are preponderant and could be subject to assymetric regulation or de-invest rulings.

Recently, Telmex announced a spin-off of some real estate and leasing corporations.

A Televisa subsidiary, obtained an injunction from a Federal judge to stop the spin-off, as it considers it is a maneuver to evade the preponderance rule, supposedly to be issued by IFT next March 9.

MVS (Dish Mexico) requested IFT to declare Televisa preponderant player in TV and CATV markets, which in turn, is a partner to TV Azteca in mobile operator Iusacell.

Soon, IFT is expected to issue a ruling on must carry – must offer on TV contents (MC-MO)

Dish Mexico has been re-broadcasting in CATV the Free-to-air signal of Televisa and TV Azteca, under a transitory article of the Constitutional Reform in telecom.

For some years now, Dish Mexico, has is force a billing and collection contract with Telmex for managing subscriptions of CATV.

So, TV Azteca requested IFT to declare that Dish Mexico is preponderant and is not eligible to free TV content for re-broadcasting in CATV.

Now, Televisa presented an injuction before a local judge to order IFT to stop the MC-MO discussion. IFT already stopped the public discussion on this, until its in-house analyzes the extent of it.

General Counsel to the President announced that will take this injunction to the Supreme Court.

This happens while the Congress is getting ready to receive the new telecom bill for discussion. Apparently next week.

Mexican telecom industry could seem very hostile to outsiders. However, all of them are bound by interconnection and open infrastructure obligations.

You, know what they say: You do not choose your domestic co-operators in a public network. Their reactions are just tough love on-court and off-court.

So, the only way to get through this is to understand that the new economy is collaborative. After all, everything converges to a 1 and 0.

And you? How are you spending this day?


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

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

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Photo credit: BT Screens by Jeremy Keith

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 Televisión 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.

All I wanted for Christmas was the telecom legislation: Now what?

All I wanted for Christmas was the telecom legislation: Now what?

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Photo credit: christmas by Joe Buckingham

Christmas wish list of many had the enacting of Mexican telecom legislation on time (December 9, 2013). By now, we know for sure that the Congress missed that important date set in the transitory articles of the Telecom Reform. The legislation is in discussion and could be approved by Q1 2014.

So what are the legal consequences for the Congress or the market to miss that date? NONE, but provides some time for interested parties to revisit their strategies.

The Congress still has constitutional authority to enact telecom laws, the transitory articles are substantially in force, the foreign investment caps are still increased, TelecomMexico has a license and the backbone tender is on its way, the must-carry/must-offer is in process of being implemented by IFETEL, as well as the relevant player rule and the unbundling of local loop.

Have a wonderful holiday season. So don´t worry and have some family time, as telecom market will still be there when you return.

Big data tools needed for implementing the Mexican Telecom Reform

Big data tools needed for implementing the Mexican Telecom Reform

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Photo credit: server by dariorug

Ibope chooses a group of homes at random to represent the population to obtain data on TV viewers to later report to broadcasters. As reported by Mexican business journal “El Economista“, TV Azteca, second largest broadcasting corporation in Mexico, sued Ibope over the validity of rating results. TV Azteca decided not to bill advertising to its clients based on ratings in the future.

Mexico will finish its migration to digital free-to-air TV by December 31, 2015. This change offers an exclusive opportunity for rating companies to penetrate not a “representative population”, but to collect real-time data of preferences from all viewers. “Peoplemeters” provided by companies like Ibope, certainly could be replaced by either “tuned” digital converters or apps for Smart TVs, as long as privacy rules are complied.

Now, considering that telecom operators are forced by law to must-carry and must-offer (with some exceptions) content broadcasted by TV operators, the spot prices will have more value, as the reach has been expanded beyond its original network. Big data analytics will play a key role in pricing and marketing for telecom companies under this rule.

On the other hand, Article 6 of Mexican Constitution protects the rights of the audience. It is still uncertain how telecom law would regulate (or not) the plurality of content in broadcasting and CATV. It is also uncertain if broadcasters will be forced to program “cultural” content and the rules for considering it as such. However, as TV is becoming more interactive, the right of the audience could be implemented with technical solutions as VOD, PPV or collective interaction of viewers (i.e. through social networks, etc.)

By March 9, 2014, Ifetel, Mexican telecom regulator, must determine which telecom operators are relevant to the market and impose asymmetric regulation or even functional, accounting or structural separation.  For the purposes of the Reform, a relevant operator is the one holding more than 50% in a given relevant market, using metrics of Ifetel for calculating users, subscribers, audience, network traffic or used capacity. In this regard, big data metrics will play essential role for backing up either ruling.

While many parts of telecom regulation are still up in the air in the Congress, the truth is that big data tools are needed for implementing the Reform. Do you have any other unseen opportunity? Let me know.

Does MVS have the edge on the Mexican Telecom Reform?

Does MVS have the edge on the Mexican Telecom Reform?

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Photo credit: Ambience: Watcha Watchin? by Dennis Hamilton

MVS, one of the relevant telecom players in Mexico, has just won an spectrum license back in Court. MVS, formerly owned 90% of the 2.5 GHz Band, and used it for cable and other satellite services. MVS has settled with MInistry of Communications (SCT) for keeping 30% of this Band. Rest of the Band will be auctioned during 2014, even though a small part of it is still in dispute between SCT and operators.

Most probably, the next settlements will be in charge of the IFETEL, who recently received from SCT over 2,000 files of pending proceedings related to operators (current and applicants). MVS is technically ready for deploying internet broadband on the 2.5 GHz, ahead of everybody else, who will have to wait for the auctions.

Will MVS seek their old time partners Intel and Clearwire for their long-awaited broadband project? or Will MVS choose to sell spectrum to operators? or will go further and sell minutes to virtual operators. Under the new Telecom Reform, all free-to-air TV broadcasters must make available its signal for free to cable companies, and cable companies must carry that signal in full for free. However, satellite cable are only forced to must-carry signal that have a coverage of at least 51% within Mexican territory, and Televisa believe MVS should not must-carry.

This week, MVS had a meeting with IFETEL, the new telecom regulator, to discuss the rules for the “must-carry/must-offer”, in apparent willing absence of Televisa and TV Azteca. MVS seems very optimistic about getting a resolution in its favour. Cable companies have an annual growth in Mexico of 13.6%. So, whether “must-carry/must-offer” passes in favour of MVS, it could increase the value of the content, as the broadcast of episodes/shows will reach a bigger market to all other eligible cable companies, and advertising value could too.

Mexican telecom reform is breaking historic entry barriers, allowing mid-size companies like MVS to capitalize many years of work into the industry. Likewise, new entrants will have a fresh start capitalizing the Reform too. However, all these new entrants do not have the scars of the veteran, and that is certainly an edge for MVS: A seasoned telecom team.


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