The world’s richest man just can’t take no for an answer. Banned by regulators from offering television service in his native country, Carlos Slim, the Mexican telecom billionaire, has started streaming shows, news, sports, and cultural programming for free on the Web.
Rivals are not taking it lightly. Mexico’s No. 2 broadcaster, TV Azteca (AZTEF), has sued Slim’s phone carriers—América Móvil (AMOV) and Teléfonos de México (TMX) —for Web broadcasts such as last month’s airing of the Pan American Games. Telmex was a sponsor of the Games and had online rights for Mexico, while TV Azteca owned a portion of the TV broadcast rights. Luis Niño, a spokesman for TV Azteca and other companies controlled by billionaire Ricardo Salinas, compared it with taking away business from Slim’s Mixup Music Store chain, which sells CDs and DVDs. “It’s as if I went right outside a store and started selling pirated music and movies, and told them, ‘It’s O.K. I downloaded them from the Internet,’ ” he says. Emilio Azcárraga, chief executive officer of market leader Grupo Televisa (TV), has called on Mexican regulators to scrutinize Slim’s moves.
Under the terms of his telecom license, Slim is barred from using his networks to offer TV service. Slim, 71, has tried unsuccessfully to reverse the ban, especially as Televisa has begun offering phone and Internet service to lure away his customers. “Streaming on the Internet isn’t TV,” Renato Flores, a Telmex spokesman, posted on his Twitter account. Flores, in an e-mail, declined to comment further.
For Slim, Mexico is the exception. América Móvil is already the biggest pay-TV provider across Latin America, with 12.5 million subscribers, mostly in Brazil, compared with DirecTV’s (DTV) 10.3 million. Last month it acquired video distribution company DLA for an undisclosed fee, gaining a platform to offer pay-per-view and online streaming of movies. “Having content is going to be an important part of the future for all of América Móvil,” says Martin Lara, an analyst at Corp. Actinver, a Mexico City brokerage. “It makes sense to build up content and acquire content even though they don’t have a license.”
Mexico’s pay-TV business generates about $3 billion a year, so it’s not surprising that Azcárraga and Salinas, whose companies are also players in cable and satellite, are putting up a fight. Stay tuned to see how this battle of the billionaires turns out.