Wednesday, April 22, 2015

Megacable Considers Launch of MVNO Operation

Mexican cable provider Megacable is planning to launch an MVNO operation by the end of 2015 or the beginning of 2016 in order to offer quadruple-play services, according to a report. Megacable general director Enrique Yamuni reportedly said that the company is studying the possibility of renting network infrastructure from either Movistar or Telcel. Megacable currently offers cable, internet and fixed telephony services.

Mexico’s mobile market has been undergoing a major shift since mid-2014, when billionaire Carlos Slim agreed to sell off assets of top operator América Móvil in order to bring it below 50 percent market share and thus head off antitrust action by regulators. As a result, competition has increased, one aspect of which has been a significant rise in the number of MVNO offerings. The popularity of multiple-play offerings—which we have observed increasing in many different markets worldwide—is one motivation for the launch of MVNOs. With this strategy, cable and fixed line providers such as Megacable can add mobile connectivity to their existing packages of services and potentially vastly augment their subscriber bases and bring in considerable revenue. The question here, though, is whether there is room in the Mexican market for more MVNOs. Telcel, owned by América Móvil, dominates the sector and has recently signed on new MVNO partners Telecomunicanciones 360 and Axtel. In 2011, Megacable tried an MVNO venture with Telefónica (which owns Movistar), which proved unsuccessful, but the market climate is likely friendlier to an MVNO launch now than it was four years ago. 

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