by R. Dharni, A. Ibanez, T. Phan, J. Mendenhall, and P. Zamorano
Grupo Televisa SAB’s recent acquisition of a 50% stake in near-bankrupt Mexican wireless company Iusacell has been touted by company management as core in its strategy to become an “integrated media-telecom Company.” While the deal has been widely panneddue to the high, $1.6 billion valuation for a company in an industry most analysts see as having few synergies with any of the company’s existing businesses, the bigger risk may lie in how the deal impacts Televisa’s successful foray into global markets.
As the dominant entertainment media company in Mexico, commanding 70% of the television broadcasting market1, Televisa has progressively built a robust global footprint through content licensing agreements, minority ownership stakes in foreign media entities, and content creation and distribution partnerships. The company has parlayed this global strategy into a market capitalization of over $11 billion2 where it stands alone as the world’s largest Spanish-speaking media company. However, if recent statements in the press are any indication, it appears Televisa does not see its domestic and global success in media as the right trajectory for the company’s future. Instead, the company is betting heavily on its telecom strategy to drive future growth.