Visit opens up opportunities in much coveted media sector
The visit of US president Barack Obama to the country has been hailed by business leaders as an opportunity for new investments in several fields — and the country’s massive telecommunications sector is one of the most overlooked areas set to benefit.
While today’s business summit in the La Rural fair grounds, organized by the United States Chamber of Commerce in Argentina (AmCham), was not expected to have speakers from this key sector, the opportunity is definitely there for US companies to gain a stronger foothold in the market.
“What’s new is that we’re witnessing the beginning of a new stage not restrained by regulations,” media expert and analyst Martín Becerra told the Herald. “This means a window of opportunity for US investors to enter the telecommunications and broadcast market.”
Right now, the US presence in the market is weak compared to countries such as Mexico and Spain, Becerra said. It is also weak compared to the high investment levels in the sector seen during the 1960s.
But not all US companies are happy with the new scenario, derived from the DNU emergency decrees issed by President Mauricio Macri that will dramatically redraw the media market, which was previously marked by the 2009 anti-trust Broadcast Media Law and the 2014 Digital Argentina telecommunications law.
One of these companies is Dallas-based telecommunications giant AT&T, the owner of satellite TV provider DirecTV, which is still banned from offering Internet services — a move that appears to benefit the Clarín Group, the country’s largest media conglomerate.
According to Fortuna magazine, members of the business entourage accompanying Obama’s visit the country are likely to voice their demands to the ENACOM communications watchdog and call for the the government decree that excludes DirecTV from this profitable business to be redrawn.
“It’s strange to see discrimination in favour of a single beneficiary if their goal is to attract investment,” one source close to the US business community, who asked not to be named, said.
He branded the language of the decree “sloppy.”
US diplomats and business representatives have been interested in the Argentine media markets for years. In 2008, while the bill was still being drawn up, the then-leader of the COMFER broadcast watchdog Gabriel Mariotto met with White House officials, who showed interest in the new regulations.
“We have an excellent opportunity to possibly positively influence drafting a first class media law,” former US ambassador Earl Anthony Wayne said in one of the cables published by Wikileaks.
According to Wayne, US-based media firms such as Turner, MTV, Disney, HBO and Discovery are using Argentina “as an important regional hub for their growing businesses.”
“Buenos Aires is now the regional hub for most of the major US broadcasters and producers of Pay TV programming in Latin America,” the diplomat said.
Movements in the market
The visit also takes place amid reports that Turner TV and its Argentine branch has made a US$400 million offer for broadcast TV channel Telefe.
Turner first began negotiations to buy Telefe years ago, but the big-money move remained on hold until Macri took office, the state-run news agency Télam reported recently.
Earlier this month, Turner Argentina’s General Manager Felipe de Stefani told the La Nación daily that his company is “interested in buying a broadcast television channel in Argentina.”
“We are convinced that the television business is changing not only in Latin America but also in the rest of the world,” he said. “Companies like us need to diversify, so we are (looking) to focus on broadcast television. We are always looking at investment opportunities in that area.”
Communications expert Guillermo Mastrini told the Herald that Turner and AT&T would set no limits on any expansion in this new media landscape, since the two companies are covered by a bilateral investment treaty between Argentina and the US signed in 1991.
The current owner of Telefe is Spanish multinational Telefónica, a major player in the market that earlier this year cried foul over the issuing of Macri’s DNU decree, which prevents the firm from entering the cable television market until 2018.
Telefónica, which began operating in Argentina in 1990 providing landline telephone services, also owns mobile phone company Movistar and Internet service provider Speedy.
Specialists believe there is vast room for improvement in the sector. An Inter-American Development Bank (IDB) report ranked Argentina as eighth out of 26 countries in the region in terms of broadband Internet penetration, trailing behind Chile, Barbados, Brazil, Panama, Uruguay, Colombia and Mexico.
But it’s also an lucrative market, with plenty of money being paid for services. A subscription for cable and Internet services can cost as much as 950 pesos (US$63) per month.
