Time Warner purchase by AT & T: Approved in Mexico

Mexico. Although the merger between AT & T and Warner has not yet been approved in the United States, in Mexico it was endorsed by the full Federal Institute of Telecommunications, IFT.

In October of last year, the purchase of Time Warner by AT & T was announced in $ 85,400 million dollars. This operation would bring together the leading converged telecommunications provider in the United States with one of the world leaders in film and television content creation.

This operation bases its logic on an international trend in which the most important companies of infrastructure and technology are beginning to produce or acquire their own contents, which together with the infrastructure resources constitute a perfect match for success.

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The decision of the IFT is under the scenario that sooner or later this purchase will have effects in the Mexican market of Telecommunications and Broadcasting and was approved subject to some conditions namely:

1. Separate Sky México regarding the provision of channels by Time Warner and AT & T at the level of Directors and Relevant Personnel.

2. Separate HBO Latin America from Time Warner's operations in the provision of Pay TV channels.

3. Obligations to respond to all requests for access to channels that Time Warmer receives from Pay TV providers and to negotiate under competitive conditions.

On the other hand, it is important to mention that AT & T in the United States has a very different structure to the operation that has Mexico since in the neighboring country they have the necessary infrastructure to offer quadruple play (Mobile, Internet, Fixed and TV) unlike Mexico , a country in which it currently only offers mobile services and has an equity stake in the Sky TV company, which also belongs to Grupo Televisa, however, they do not have any joint commercial agreement of which it benefits in operator that could affect economic competition.

Given the previous scenario, the IFT approved the merger of both companies in advance to the US regulator, since its ex ante analysis of the merger and subsequent establishment of preventive measures, does not warn significant risks to the competitive telecommunications in Mexico.

But, then, how could it affect or benefit the merger of those two companies into our country? In the medium term we could see AT & T offering content, including Time Warner, through its mobile platform, a strategy that has already implemented in the United States.

This would allow it to consolidate itself as a competitive alternative in the access and provision of audiovisual content, as opposed to traditional models of linear programming and other video providers that would provide added value and a better user experience to the current and potential subscribers of its services.

Text written by Gonzalo Rojon, of The Competitive Intelligence Unit SC
 

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