TV Grupo Televisa SA

MEXICO CITY—Mexican broadcast and media company Grupo Televisa SAB plans to make capital expenditures this year of about $1.6 billion, with the lion's share going to bolster its fast-growing cable and telecommunications business, Executive Vice President Alfonso de Angoitia said Friday.

Amounts this year will be similar to those of 2015, when Televisa invested almost $1.1 billion in cable and telecom, the official told analysts in a conference call.

"We're in a very heavy capex cycle at this point in time. We will be seeing a reduction in the following years, but this will be the most heavy year of them all I believe," he added.

While sales at Televisa's content division slipped 1.5% last year, including a nearly 10% drop in broadcast advertising revenue, cable and telecommunications revenue jumped 36% and satellite television sales were 10% higher.

Aside from 7.2 million satellite television subscribers, Televisa ended last year with 4.1 million cable TV subscribers and close to 5 million subscribers to its broadband and voice services.

The company has shelved for now plans to add mobile to the mix following a foray into that market with a 50% stake in carrier Iusacell. Televisa sold that stake at a loss after several years. Iusacell has since been acquired by AT&T Inc.

"We're not planning to enter into the mobile business. We're focusing on the businesses that we have today, which have double-digit growth," Mr. De Angoitia said.

Last year's decline in broadcast advertising revenue was largely the result of Televisa's efforts to raise rates, which met with some resistance from customers. Broadcast advertising accounted for 26% of total revenue last year, down from 32% in 2014.

José Baston, president of television and content, said upfront advertising sales for 2016 were down just 1.5%, which he considered encouraging.

"Prices were up and volumes were down in the upfront. Clients took the increase in the prices and were being more conservative in volume," he said. Most advertisers continued with the broadcaster this year.

Televisa, the world's biggest producer of Spanish-language television content, this week launched streaming video service "blim" to compete with Netflix Inc. and America Movil's Clarovideo service. The service will have about 70% Spanish content, including Televisa and third-party productions. The rest will be English, Mr. Bastó n said.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

February 26, 2016 13:55 ET (18:55 GMT)

Grupo Televisa (NYSE:TV)
Historical Stock Chart
From Mar 2024 to Apr 2024

Grupo Televisa (NYSE:TV)
Historical Stock Chart
From Apr 2023 to Apr 2024