Telecommunications – America Movil Enters Content Provider Space to Increase Reach

Could a wireless operator give significant challenge to an established television programming provider. According to a recent Reuters (News  – Alert) piece, America Movil, a leading Latin American wireless operator, has begun to produce programming for Colombian television. This could be the first step into regional media for its owner Carlos Slim, a Mexican tycoon.

While the company is a telecommunications giant in Latin America, it has never been known to produce content. At a conference in the Mexican capital, officials shared a few details. With in-house shows, America Movil has the potential to be a real through to Televisa, the regional giant and the world’s top Spanish-language content producer.

With the addition of the content production in a portfolio of fixed-line phone, Internet and television services, this could put Slim in a whole new game that could effectively expand his already vast empire.

Oscar Von Hauske, America Movil's wireline business director, addressed roughly 200 guests at the gathering, highlighting that penetration of pay-television in Latin America is still very low. This indicates that the company could tap underserved audiences and therefore whole new revenue streams.

Based on the information he provided, Argentina and Chile are two of the countries with the highest pay-TV penetration at 56 percent and 40 percent, respectively.

To reach its goal as the top communications firm from Mexico to Argentina, America Movil has been rapidly adopting new technologies and services. Two years ago, the company launched satellite pay television in Brazil and now has one million subscribers.

As company officials addressed investors, they demonstrated ambitious forecasts that predicted growth across Latin America and beyond for the world’s third largest cell-phone company according to the number of wireless clients.
"We are open to invest outside Latam; we are open to review alternatives," said Chief Executive Officer, Daniel Hajj, in the conference. "If it makes sense, we are going to do it … there are few opportunities left in Latin America."

In other America Movil news, the company announced plans to invest approximately $6 billion in capital expenditure in 2011 to expand its network coverage and customer base. The company's combined capital expenditure for the first nine-month period of fiscal 2010 was MXN50 billion ($4 billion). The company has consolidated the results of Carso Global Telecom (News – Alert) and Telmex Internacional in July 2010.