Televisa Reports Mixed Results in 2Q20 Due to COVID-19

Quarterly reports are reflecting the magnitude of the COVID-19 pandemic. First on the list is Televisa, which saw an increase in profit in paid television, internet and landline telephony services but a reduction in its advertising revenue. The company's telecommunications service benefited and recorded a 10.7 percent increase in sales in 2Q20 that includes paid television, fixed internet and fixed telephony to MX$11.308 billion (US$498.8 million). 

Sky, the satellite television operator of the company led by Emilio Azcárraga, was also benefited by COVID-19 and recorded a 3.1 percent increase in sales to MX$5.514 billion (US$243 million). In a conference with analysts, CEO of Sky Mexico Alexandre Penna said the business saw its highest growth in the last eight quarters driven by the need for connectivity and entertainment in the midst of the pandemic.

In 2Q20, Televisa also started to compete in the mobile phone market in Mexico. Since June 20, Grupo Televisa offers, through its izzi brand, mobile phone service with unlimited internet in 17 cities in the country at a cost of MX$250 (US$11). The service, which uses Altán Redes’ infrastructure, includes internet, calls and unlimited messaging to Mexico, the US and Canada, as well as 4.5G technology. No revenue has yet been reported in this division, said the brand's CEO Salvi Folch. However, the company expects results in the coming months.

This move into the mobile phone market will cause a decrease in rates in the market, with services 80 percent cheaper than the competition, said consultancy firm The Competitive Intelligence Unit (The CIU). "izzi's foray into the mobile market is a disruptive addition to a highly concentrated market, where Telcel accumulates 72 percent of revenue," said The CIU.

Not Everything is Rosy

Economic disruption also had an effect on Televisa's 2Q20 report. The advertising revenue of the Mexican company reached MX2.92 billion (US$128 million), 33.1 percent less than the amount registered in the same period of 2019. The reduction in advertising budgets occurred in many categories, such as food and beverages, retail, telecommunications, travel and out-of-house entertainment. Other segments affected by the pandemic include businesses related to sports and gaming activities, with revenues falling 67.1 percent to MX$567 million (US$25 million) compared to 2Q19.