América Móvil’s Claro (AMX) has been granted a 15 year license to sell cable television with the option to renew it for another decade if they actually turn a profit. The contract was signed last October but they could not start selling the new service until now.

I want my HBO

This is bad news for DirecTV (DTV) and Televisa (TV) which have been selling satellite TV for decades in Costa Rica with the Sky brand. Unlike other regions of the world, in Latin America there has been a satellite TV monopoly since the only two companies, Sky and DirecTV, merged.

This had been extremely profitable for shareholders of DirecTV and Televisa for decades until Dish (DISH) decided to enter the Latin American market a few years ago with a little help from América Móvil (AMOV) which is commanded by the world’s richest man, Carlos Slim Helú from Mexico.

With revenues of over $27 billion, DirecTV is currently the sixth largest broadcaster in the world. With revenues of over $4 billion, Televisa is not too far behind at 20th in the same category. With profits of $2.6 billion DirecTV is currently the sixth most profitable broadcaster in the world. With profits of $500 million Televisa is again at 20th in the same category. With assets of $18.4 billion DirecTV is currently the tenth largest broadcaster in the world by assets. Televisa is also big in this category at 17th.

You don’t want to go to war with enemies as big as those two. Unless of course, you are in charge of increasing América Móvil profits from $5.9 billion to $7.6 billion. Which is what Portugal Telecom currently makes. The task is simple: Bite $1.7 billion from DirecTV and Televisa’s lunch.

This strategy is global, complicated and it will take a few years to be completed but in the end they will succeed. It’s not a bad idea to invest in América Móvil for your retirement. You will make millions in the future when these obsolete monopolies are destroyed worldwide. Today it’s Costa Rica, tomorrow Nigeria.

The basic cable package includes 61 channels. People from Costa Rica will now be able to subscribe to HBO for less which is good news for Time Warner (TWX). They now have over 100,000,000 subscribers worldwide and this will only increase that number by a few million in a few years.

Source: Seeking Alpha