Grupo Salinas Takes The Stakes To Another Level With lusacell
Grupo Salinas Takes The Stakes To Another Level With lusacell
Mexican firm Grupo Salinas is all set to buy 50% of the country's third largest wireless operator Isuacell which it currently does not already own from the broadcasting group Grupo Televisa for a sum of $717 million. The owner of Grupo Salinas, Ricardo Salinas is now looking for a strategic partner to boost the chances of further growth of Iusacell.
The chairman of Grupo Salinas is buying the partner Grupo Televisa's stake of around 50%. The latter will be making a book loss of about $320 million on the sale. The bulk of the $900 million loss has already been written down by Grupo Televisa. The buyout will be given regulatory approval following scrutiny. This buyout reverses the deal approved 2 yeara ago when Televisa fended off the regulators to be able to purchase half of Iusacell for $1.6 billion.
The telecom and broadcast sectors in Mexico are caught in the throes of change as the government has pushed through sweeping reforms to enable the sector to become more competitive. America Movil which is owned by Carlos Slim is also said to be selling off assets to reach the magic below 50% in Mexican telecom sector following the judgement that it was a dominant market player.
Spanish firm Telefonica had also been rumoured to have been involved in talks with Iusacell. A spokesperson from the Grupo Salinas has said that the future partner for the firm would be taking the equity stake in Iusacell. Reuters has questioned the spokesperson as to whether Telefonica was the candidate for strategic partnership. 4 to 5 companies are said to be interested in a partnership with the company based on what the spokesman said.
Telefonica has not been sitting idle either. It has turned its attention to the cable television market. Just last month, it paid $654 million to acquie the rest of Cablecom. Grupo Televisa will be facing the challenges following the break-up of the partnership. It can think of forming an alliance with another company or setting off as a MVNO-Mexican mobile virtual network operator.
Salinas has indicated via Twitter that the stake of the company in Iusacell is not up for grabs. Grupo Iusacell has 2 powerful brands namely Iusacell and Unefon. Around 25% of the subscribers of Iusacell are post-paid. This is a massive advantage as post paid customers are a more lucrative option than pre-paid customers. They are also more likely to be high income users who need and use mobile services more often and with less budgeted approach to spending cash on this. But Iusacell has its more affordable avatar as well in Unefon, which to quote Reuters “serves the lower end of the market.”
Higher or not so high, any paying customer deserves to be given good service. Iusacell has the provisions for those who like to splash cash as well as the common man. This dual corporate persona can have a lot of payoffs for Grupo Salinas if fast growth is on its agenda.
