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 plenary session of the Federal Institute of Telecommunications, IFT.
In October of last year, the purchase of Time Warner by AT&T for $85.4 billion was announced. This operation would bring together the leading converged telecommunications provider in the United States with one of the world leaders in the creation of film and television content.
This operation bases its logic on an international trend in which the most important infrastructure and technology companies are beginning to produce or acquire their own content, which together with infrastructure resources constitute a perfect pairing for success.
The decision of the IFT is given under the scenario that sooner or later this purchase will have effects on the Mexican Telecommunications and Broadcasting market and was approved subject to some conditions namely:
1. Separate Sky Mexico from the provision of channels by Time Warner and AT&T at the level of Advisors 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 on competitive terms.
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 Mexico has 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 for now it only offers mobile services and has a shareholding of the satellite TV company Sky, which also belongs to Grupo Televisa, however, they do not have any joint commercial agreement from which this operator exclusively benefits that could affect economic competition.
Given the above scenario, the IFT approved the merger of both companies in advance of the US regulator, since its analysis ex ante to the merger and subsequent establishment of preventive measures, does not warn of significant risks to the competitive dynamics of telecommunications in Mexico.
But then, how could the merger of these two companies affect or benefit our country? In the medium term we could see AT&T offering content, including Time Warner, through its mobile platform, a strategy that it 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, compared to traditional linear programming models and other video providers that would provide added value and better user experience to current and potential subscribers of its services.
Text written by Gonzalo Rojon, from The Competitive Intelligence Unit S.C.
