Mexico’s Televisa has bought shares of Axtel in a Win-Win move for both the companies. Market reports from Mexico confirm the landmark deal between the firms that would redefine the communication service market in the country. According to the agreement, Axtel will sell the residential business in six cities to Televisa. The residential business includes high-speed broadband services delivered over the fiber-optic network.
Market analyzers observe the deal as fair and balancing deal due to the fact that Televisa can benefit from the fiber-optic network already built and owned by Axtel. On the other hand, Axtel can reduce its mounting debt due to financial instability. Axtel was looking for ways to reduce its debt. Axtel will sell its residential business in six cities. Televisa gets an installed fiber optic network to boost its service.
Axtel (Axtel S.A.B. de C.V.) is a Mexican telecommunications company headquartered in San Pedro, near Monterrey. Axtel provides telephony, internet, and television services via its fiber to the home networks in 45 cities of Mexico. Apart from the 3 major communication businesses, Axtel has an IT IT Services. It is the second largest landline telephone service provider and a relevant virtual private network operator.
Televisa (Grupo Televisa, S.A.B.) is a Mexican based multi-mass media company, which is the largest in the Spanish-speaking world. Televisa is a major international entertainment business, with much of its programming airing in the United States on Univision, with which it has an exclusive contract. Televisa also operates a subsidiary called Televisa Networks, which is responsible for the distribution of Televisa programmes by satellite. Televisa Networks distributes the Las Estrellas signal through satellite to Europe, Australia, and New Zealand.
The acquisition will see the Axtel sell its direct fiber optic residential home business to Televisa in six cities -Ciudad de México, Zapopan, Monterrey, Aguascalientes, San Luis Potosí and Ciudad Juarez- for 4,713 million pesos.
At the end of September 2018, Axtel’s debt was at 19,923 million pesos. Axtel can alleviate a part of its debt by the money it gets from the dealing. Axtel took several measures to reduce its debt, such as the sale of 154 telecommunications towers for 61 million dollars. In addition, Axtel focuses its attention more to business and government clients, in the face of the tough competition that exists in the residential customer business, in partnership with giants like América Móvil, in telephony, or Televisa, in pay television.
Axtel serves 8 out of 10 of the main multinational corporate clients in Mexico and has a strong presence in the business and government sectors. According to Banorte’s analysis, Axtel’s residential business contributes only about 18% of revenues, and its sale is a possibility.
Televisa can promote its internet service company called Blue Telecomm with the optical fiber that it has just acquired from Axtel. The most interesting opportunity is for Sky and Blue Telecomm. This brand has not been linked to a single technology, it has an agreement with Red Compartida, it has the AT & T network for fixed wireless use, it also provides service through the Telmex network and through the Izzi network itself.