Vivendi SA (VIV)’s Brazilian unit, GVT, is planning a joint venture with satellite-equipment maker EchoStar Corp. (SATS:US) to offer pay-television service across Brazil, taking on DirecTV (DTV:US) and America Movil SAB.
The new company, to be based in Brazil and run by GVT, will use the Vivendi division’s communications network and EchoStar’s satellite and video technology, according to a statement released today. The partners said they expect to benefit from higher demand from soccer’s World Cup in 2014 and the Olympic Games in 2016, both taking place in Brazil.
EchoStar, based in Englewood, Colorado, is seeking to build on the success of its Dish Mexico joint venture, which has gained 2.3 million subscribers since its 2008 debut. While Paris-based Vivendi is selling off other telecommunications assets, it is keeping phone-and-Internet provider GVT after rejecting bids earlier this year from DirecTV and others.
GVT already offers pay-TV over its home Internet connections, with about 530,000 subscribers at the end of June, according to Brazilian regulator Anatel. That compared with 9 million for Mexico City-based America Movil, 5.2 million for El Segundo, California-based DirecTV and 889,000 for Rio de Janeiro-based phone company Oi SA.
America Movil, the phone carrier controlled by billionaire Carlos Slim, has a partnership with Dish Mexico for marketing and billing. EchoStar co-owns Dish Mexico with a local company, MVS Comunicaciones SA. America Movil has an option to acquire a majority stake in Dish Mexico if it obtains a license to offer pay-TV service in its home country.
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