VIVA Mexico!!!
From Heartland's 10-K filing <March 31, 1997>:
In July 1996, the Company (Heartland) acquired 49% of the outstanding capital stock of Television Interactiva del Norte, SA de C.V., a Mexican corporation ("Telinor"), for approximately $0.5 million. The Company anticipates that Telinor will seek to aggregate wireless cable channel rights throughout Mexico.
From Heartland's 10-Q filing <November 14, 1997>:
In September 1997, the Company (Heartland) sold a 39% equity interest in Television Interactiva del Norte, S.A. de C.V. ("Telinor") for U.S. $0.9 million to CS Wireless Systems, Inc. ("CS Wireless"). In addition, the Company sold to CS Wireless two promissory notes payable by Telinor for approximately U.S. $2.56 million, representing principal and accrued interest payable under such notes. Following this transaction, the Company retained a 10% equity interest in Telinor.
[News] Mexico's MMDS Auction Closes with High Prices
By JO DALLAS
MultiChannel News - VOLUME 19 NUMBER 8 FEBRUARY 23, 1998
204.243.31.23
Mexico City -- Mexico's government raised $63 million through the auction of wireless cable spectrum in a competitive bidding process that concluded this month.
A total of 44 multichannel multipoint distribution service (MMDS) concessions were granted to top bidders in a landmark auction. It was not only the first time that Mexico has sold off wireless spectrum, but it was also the first auction of its kind in Latin America.
Traditionally, spectrum has been granted on a discretionary basis across the region, but public auctions where licenses go to the highest bidder are becoming the vogue. This past October, Brazil began the biggest ever sale of MMDS and hardwire cable licenses in Latin America, although the winners have not yet been announced.
Given Mexico's groundbreaking auction, there is no established benchmark to measure its prices against. Bid participants, however, testified to a hard-fought bidding process, which generated bullish prices.
TV Espectro de San Luis -- which won 24 concessions, the highest number snagged by one single company -- said prices were slightly higher than anticipated, but they were still within an acceptable ballpark.
'Some bidders complained that the auction was expensive. But the price ranges bid were reasonable -- certainly reasonable enough to make a good business,' said Espectro's president, Mauricio Enrique Vinay Hill.
Vinay said the company ended up paying an average of $6 per household, rather than an expected $5 per household.
'We didn't think that the price would pass $5, but it wasn't a problem that we paid a little more than that. In Latin America, the average [price per household] for MMDS is probably somewhere between $5 and $9,' Vinay added.
Mexico's largest MMDS operator, MVS Multivisi¢n, disagreed that auction prices settled at a fair and acceptable level. Multivisi¢n felt that they soared so high that the company made a surprising decision to withdraw from the auction completely, without taking one
license.
'After 20 days [of the auction], prices had risen so high that to have continued, we would have had to double the investment that we had set aside,' said Ignacio Rodr¡guez, Multivisi¢n's vice president. 'People were paying crazy prices ... At those kind of prices, it'll take decades to recoup investments.'
Instead, Multivisi¢n is concentrating on selling its programming services to operators, although it did not rule out future partnerships with new licensee winners, Rodr¡guez added.
Unsurprisingly, bid winners didn't share Multivisi¢n's gloomy predictions about time frames to reach the breakeven point. Espectro expects to start making a profit in five years' time and to achieve a total subscriber base of some 2 million, Vinay said.
Espectro's strategy is to target highly populated areas where there was little competition in the way of hardwire cable. In the territories where the company won concessions, Vinay estimated that there are some 200,000 existing hardwire cable subscribers.
Mexico's virgin pay TV market makes it an attractive prospect, analysts said.
'There's a low penetration level of pay TV services and a high level of TV penetration, and households watch an average of over five hours of TV a day. All of those factors are driving the [pay TV] business,' said Leonardo Simpser, senior media analyst at investment bank Deutsche Morgan Grenfell's office here. |
