TV Azteca Loses 4 Million Cable Viewers in Price Dispute

TV Azteca SAB (AZTECACP)’s networks are being dropped by Mexican cable-TV carriers representing more than 4 million subscribers in a dispute over terms.

Megacable Holdings SAB, the nation’s largest cable company, cut the channels yesterday, Chief Financial Officer Luis Zetter said. Cablemas SA and TVI, both controlled by Grupo Televisa SAB, said on their Twitter accounts they were dropping the same stations.

The companies are pulling Azteca’s channels because it is charging for content that used to be free, said Ana Maria Solorzano, legal director for Cablecom, a Mexico City-based carrier that also dropped the channels. Azteca wants to charge a fee by packaging its over-the-air stations with cable networks, such as news and soap opera channels, she said.

“If they charge us, we’ll have to raise prices for subscribers, which we don’t want to do,” Solorzano said yesterday in a phone interview.

Dan McCosh, a spokesman for Azteca, declined to comment.

Telecable, controlled by closely held Grupo Hevi, said on its website that it was dropping Azteca for the same reasons.

“It pains us to be party to this situation, since we’ve tried every way to avoid affecting our subscribers,” Telecable said.

Azteca, Mexico’s second-largest broadcaster, airs the soccer games of Mexican teams such as Cruz Azul and Monarcas Morelia and attracts about 30 percent of the nation’s broadcast audience, behind Televisa’s 70 percent.

Even on cable networks, where they have to compete against international programming, Televisa and Azteca get an important part of the audience, Mexico’s antitrust commission concluded in a ruling last month.

Coverage Areas

Megacable has 1.9 million TV subscribers and covers Mexico’s second-largest city, Guadalajara, where it is based. Cablecom and Hevi combined have about 1.1 million subscribers, according to Signals Telecom Consulting in Montevideo, Uruguay.

Cablemas and TVI have a combined 1.4 million subscribers. Empresas Cablevision SAB, a separate cable unit of Televisa that covers the Mexico City area, continued to carry Azteca’s channels, as did Televisa’s satellite-TV unit, Sky.

That’s because those companies negotiate directly with Azteca, while the others hold their contract through a separate company, Productora y Comercializadora de Television SA, Solorzano of closely held Cablecom said.

Cablecom, based in Mexico City, operates in 16 Mexican states, including parts of the urban area surrounding the capital. Hevi, based in Guadalajara, offers cable service in 10 Mexican states, with coverage in cities such as Nuevo Laredo and Irapuato, according to its website.

Complaints

Customers have been calling to complain about Azteca’s absence, Solorzano said. She said she didn’t know how long the standoff would last.

An official at Mexico City-based Televisa declined to comment. Dish Mexico, Mexico’s second-biggest satellite carrier, doesn’t carry Azteca channels.

Televisa also offers its cable channels in a package with its broadcast networks, a practice that has drawn complaints from Dish. Televisa’s contracts are different because they treat authorization to carry broadcast networks separately from paying for cable networks, Solorzano said.

Azteca, controlled by billionaire Ricardo Salinas, fell 1.6 percent to 8.71 pesos at the close in Mexico City, the biggest decline since Jan. 17. Megacable slid 0.1 percent to 27.29 pesos. Televisa rose 2 percent to 51.72 pesos.

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net

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