Izzi Faces 750,000 Cancellations from Rate Hikes, Hurricane Otis

Izzi is facing a significant loss of users despite its merger with Sky. The cancellation of more than 750,000 accounts is attributed to several factors, including rate increases, the elimination of channels, and the aftermath of Hurricane Otis. 

Izzi's poor performance has been directly linked to the rate increase implemented in April in response to the country’s inflation. This decision led to the loss of 10,700 users. 

Another contributing factor to the account cancellations was the removal of the Afizzionados channel, an exclusive sports content provider. This change contributed to the cancellation of 65,000 accounts, according to Expansión. 

Francisco Valim, CEO, Izzi, explained that the decision to remove Afizzionados was due to the loss of broadcasting rights, with most of the content now available on ViX, TelevisaUnivision's streaming platform. Although Afizzionados accounted for only 1% of Izzi's total revenues, its removal has impacted both revenues and users' perception of value.

During a call with analysts to discuss Izzi's second-quarter 2024 financial statements, Valim noted that the discontinuation of Afizzionados was a strategic move to reduce costs and simplify the company's offering. 

The impact of Hurricane Otis, which struck in October of last year, has also significantly affected Izzi's current situation. The company has encountered substantial challenges in rebuilding its fiber optic network in Acapulco, particularly in areas like Punta Diamante, where it has a large customer base.

Izzi plans to invest US$30 million in network reconstruction this year, though this investment has not yet produced the desired results. The company is also dealing with issues related to non-payment by some customers affected by the conditions in the reconstruction areas.

The difficulties faced by Izzi reflect broader challenges for Grupo Televisa, which has had to spin off several non-strategic businesses and scale back its local television operations to focus more on media and telecommunications. According to Expansión, the company is working to adapt its business model to new consumer habits and increasing competition from technology platforms.