Telemundo Might Start a Network in Mexico

MEXICO CITY â€”  NBC’s Spanish-language unit, Telemundo, could launch a new broadcast television network in Mexico within two years, the company’s president said Thursday.

The Mexican market is currently dominated by Televisa, with rival TV Azteca a distant second, but Telemundo wants to join the battle.

“I would think that the way things are going, it is possible within a year or two that there will be a third network,� Telemundo President Don Browne said in Mexico City.

Last week, Telemundo and its Mexican partner, Grupo Xtra, asked Mexico’s government to auction more frequency bands so that they could enter the TV market here, and Mexico’s telecom regulator says there is room for at least one more national broadcast network.

Browne said Telemundo’s expansion in Mexico, Latin America’s No. 2 economy, was a key initiative for NBC.

NBC is 80% owned by General Electric Co. and 20% by Vivendi Universal. It is vying to rise from last place in U.S. television ratings, and investors are concerned about its performance in the 2006-07 broadcast season, which began last week.

Telemundo is already exploring other options if it is unable to set up a network in Mexico.

“We are also looking for station acquisitions through which we can distribute our product,� Browne said. “Not a network, certainly -- a television station. We are talking to several people.�

Televisa operates three national networks and TV Azteca has two. But other TV stations across the country could be used to air Telemundo’s programs.

“There are other channels in Mexico City; Channel 28 is one. We have none now. We [would] rather have a small reach than no reach at all,� Browne added.

Channel 28, which covers only the Mexico City area, was recently bought by Olegario Vazquez Rana, a Mexican entrepreneur who also owns radio stations and a newspaper.

Telemundo currently produces four shows from Mexico, including a soap opera, but they air only in the United States.

Together with Xtra, the company plans to set up its own production studio in the capital, where it could invest about $25 million a year. The studio could be up and running by the first quarter of next year.

Browne said Telemundo was optimistic about current changes in the media and telecommunications market.

Mexico has a population of more than 100 million. Most have access to broadcast TV or radio, but only about 20% have a fixed-line phone.

With a final sign-off from the government pending, the industry awaits the disclosure of new rules that would allow telephone companies to enter the television market and cable and media firms to offer phone services.