TV Azteca still eyeing Peru backbone network

Mexico's TV Azteca is still evaluating its participation in Peru's underused fiber optic backbone project as the South American nation is launching a full review of the network, the company said in a statement.

Azteca, the second largest Spanish-language TV producer in the world, has a 20-year concession for the project through its Azteca Comunicaciones unit. The backbone has been criticized for having too high access costs which has prompted operators to build their own competing fiber optics infrastructure.

The Mexican company's management "is in the process of updating the valuation and perspectives of its investments in telecommunications in Peru, as previously requested by the board, in order to determine its consistency with the strategic focus of the company. Based on this analysis, TV Azteca will formulate a plan of action regarding these investments," the broadcaster said in its Q3 financial results.

It did not provide a timeline for when it will come to a decision on the US$333mn project.

REVENUE, EBITDA UP

TV Azteca reported an 8% increase in third quarter revenues to 3.539bn pesos (US$183mn) helped by a rise in domestic advertising, which represented 95% of the company's net sales. Revenues for the Peruvian operation were flat at 95mn pesos.

Ebitda grew 4% year-on-year to 949mn pesos, said the company, which reported earnings of 438mn pesos as opposed to a 308mn-peso loss in the same period of 2017.

Azteca also said that it decided to pay in advance US$92mn related to a loan due in 2020 from American Tower (ATC), which had become a sore spot earlier in the year when the US telecom tower operator reported Azteca had defaulted on the terms of the deal.

"The agreement included a cash payment of US$53mn; the remaining US$39mn is amortized through the use by ATC of available space on TV Azteca's transmission towers in Mexico. The company also paid interest of US$6.5mn," Azteca said.

The original deal, signed in 1999, involved a US$120mn loan in exchange for commercial and marketing rights for about 190 broadcast towers in Mexico, which helped American Tower increase its foothold in the Latin American country.