Our long-term recommendation for Grupo Televisa (TV) is Neutral, which means the stock will perform mostly in line with the broader market. We remain positive related to the company’s recent ventures in the telecom sector, especially in the wireless market of Mexico that should keep growing in the long-run.  After lots of controversies, Televisa has finally fulfilled its long-cherished aim to enter the lucrative Mexican wireless market.
 
While the economic outlook may not be very attractive, the spending power of the Mexican market and the desire of advertisers to turn their brand names into household staple via media channels remain a positive theme in 2010. Televisa has also taken a strategic decision to acquire a partial stake in its rival Univision to enter the U.S. market. However, it is also our view that these positive factors are already reflected in the current valuation of Televisa.
 
Recently, the Mexican government issued a license to Televisa and its partner Nextel Mexico for a slot of wireless spectrum. In August 2010, the Mexican Wireless regulator CoFeTel approved the auction bid submitted by the Televisa-Nextel venture for a 30 MHz nationwide block in the 1.7 GHz band of wireless frequency. In last July, Televisa and Nextel together won one block of frequency ranging from 1850 MHz – 1990 MHz.
 
Televisa has decided to purchase a 35% stake in its U.S. rival Univision Communications for $1.2 billion. As per the agreement, the company will pay $130 million in cash for a 5% stake and will lend convertible debt for the remaining 30% stake. Televisa will have a right to buy an additional 5% stake over the next five years, bringing its potential ownership up to 40%. But the existing American regulations capping the foreign ownership of a U.S. broadcaster limit Televisa to about
 
GRUPO TELEVISA (TV): Free Stock Analysis Report
 
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