By Sebastián Lacunza
Editor-in-Chief
Editor-in-Chief
Macri decrees a suit that’s tailor-made for Clarín
There’s no lack of rivals for stardom in Argentina’s telecommunications and media markets today. In one corner, the Clarín Group, with a presence in all fields of communication and a position not far short of enjoying a monopoly in the cable TV markets of such highly profitable cities as Buenos Aires and Córdoba (mustering 3.5 million clients nationwide).
And in the other corner, Telefónica, a Madrid-based company which administers 6.5 million landlines and 16.5 million mobile telephones, as well as the broadcast television channel Telefe, not to mention several others in different provinces.
Both companies have great expectations when it comes to participating in the convergence of telecommunications, Internet and news and entertainment content. Although there are other important players, none are better poised to make that great leap forward than Clarín and Telefónica.
During its many years of dominance, the Clarín Group built up a cable network that enabled it to favour its own signals, edging its competitors aside or removing them altogether. At the same time as Argentine Football Association’s (AFA) Don Giulione (aka Julio Grondona) was ensconced in the awarding of soccer broadcasting rights, the Clarín's Multicanal bought up the cable systems in over 150 localities — big, medium and small.
By the end of 2007, just before their very public rift, Néstor Kirchner approved the mother of all mergers with Cablevisión, at that time the only relevant competitor in the cable TV market. In recent years, and despite the limits on growth supposedly introduced by the 2009 Broadcast Media law, Cablevisión accounted for almost all the Clarín Group’s profits. Via injunctions, the company could fix the price of monthly subscriptions at will.
With the long-yearned for “convergence” now coming up, the conglomerate grouping Channel 13, Radio Mitre, La Voz del Interior and TN news among 40 media outlets in total is now keen on having all the limits set on the expansion of their cable networks by the 2009 law (namely 35 percent of the market and 24 localities) removed, as well being permitted access to operating mobile telephone networks.
Those limits were wiped out by the emergency decree signed by Mauricio Macri on December 29, while he was vacationing in Villa Langostura. The Clarín Group can now extend its cable network and even annex a handful of radio stations and television channels. Its foray into the telephone market would face no further barrier than having to invest a fair whack of dollars, as the government’s approval process will be mere rubberstamping.
Clarín says that it feels like a dolphin in front of a whale when comparing itself to Telefónica. Measured in terms of invoicing and international profits, the group with its headquarters on Tacuarí Street has a point. Although when it comes to the Argentina’s media market, the equation is precisely inverse. Telefónica’s leadership in telecommunications has been compounded by the fact that Telecom, its only competitor for landlines and one of the three main players in terms of mobile telephones and Internet, was linked to the Spanish giant via its shares in Telecom Italia, ties which lasted from 2007 to mid-2015.
Like Clarín, Telefónica is especially interested in two central objectives of telecommunications “convergence” — namely cable TV and in particular, access to the satellite TV market. For that latter aim it already has the basic infrastructure, the cost of which remains beyond Clarín’s radar and just needs the official permit. But it won’t have it, not in theory anyway. The decree whose full contents were divulged yesterday blocks any radio, TV or telephone concessionaire from exploiting paid satellite TV. As for cable, Telefónica will have to wait until January 1, 2019.
Frustration and incredulity
The company’s mood last night swung between frustration and incredulity as it took in the news, while it warned that the investments promised by the Telefónica group might not be forthcoming. “They’ve pulled the carpet from under us. Who can guarantee that in 2018 or 2019 there won’t be another grace period and we’ll be frozen out again?”, a source from the Spanish company said.
It might be added that the Madrid-based company also had its eye on a third convergence objective — but the previous Cristina Fernández de Kirchner administration had already taken care of that when, using a specious argument, they wiped out the ban on a public service company (for example, Telefónica) being able to exploit a television channel (Telefe, to quote another example).
If we only focus on the big leagues, the lucrative telecommunications market will acquire new dynamism in terms of capital inflow, something which cannot be translated into a better service without greater concentration. Middleweight cable operators such as Supercanal (Grupo Uno) or Telecentro (Pierri) may be sold to or merge with telephone companies. Direct TV (AT&T), which enjoys a tactical alliance with the Clarín Group, will continue being the king of satellite TV. Indalo, Prisa, Cadena 3 and XXIII will not need to relinquish excess licences as required by the law, which the emergency decree is effectively trying to repeal.
Time for tears for many Kirchnerites. They are defending the previous text, which was stranded in the Supreme Court and lower legal spaces for five years, with valuable arguments as to the multiplicity of voices and the social control of communication policies. Fine words contrasting with their arbitrary implementation of the broadcasting legislation, which was a no-holds-barred struggle against the dominant group, paying scant attention to developing the remainder of the law’s clauses.
To come up with this suit, tailor-made for Clarín’s needs, and to replace a law which had been debated for years, Macri resorted to an emergency decree less than 20 days after becoming president. With the Supreme Court’s feeble intervention bid shelved, only the pro-government press can offer its siren songs to institutional quality. The regulatory authority (Ente Nacional de las Comunicaciones) will debut with five Macri delegates out of a total of seven. Any monitoring by public universities, trade unions, indigenous people and civil society was wiped out with the stroke of a pen — it’s now open season for happy hunting.
@sebalacunza
There’s no lack of rivals for stardom in Argentina’s telecommunications and media markets today. In one corner, the Clarín Group, with a presence in all fields of communication and a position not far short of enjoying a monopoly in the cable TV markets of such highly profitable cities as Buenos Aires and Córdoba (mustering 3.5 million clients nationwide).
And in the other corner, Telefónica, a Madrid-based company which administers 6.5 million landlines and 16.5 million mobile telephones, as well as the broadcast television channel Telefe, not to mention several others in different provinces.
Both companies have great expectations when it comes to participating in the convergence of telecommunications, Internet and news and entertainment content. Although there are other important players, none are better poised to make that great leap forward than Clarín and Telefónica.
During its many years of dominance, the Clarín Group built up a cable network that enabled it to favour its own signals, edging its competitors aside or removing them altogether. At the same time as Argentine Football Association’s (AFA) Don Giulione (aka Julio Grondona) was ensconced in the awarding of soccer broadcasting rights, the Clarín's Multicanal bought up the cable systems in over 150 localities — big, medium and small.
By the end of 2007, just before their very public rift, Néstor Kirchner approved the mother of all mergers with Cablevisión, at that time the only relevant competitor in the cable TV market. In recent years, and despite the limits on growth supposedly introduced by the 2009 Broadcast Media law, Cablevisión accounted for almost all the Clarín Group’s profits. Via injunctions, the company could fix the price of monthly subscriptions at will.
With the long-yearned for “convergence” now coming up, the conglomerate grouping Channel 13, Radio Mitre, La Voz del Interior and TN news among 40 media outlets in total is now keen on having all the limits set on the expansion of their cable networks by the 2009 law (namely 35 percent of the market and 24 localities) removed, as well being permitted access to operating mobile telephone networks.
Those limits were wiped out by the emergency decree signed by Mauricio Macri on December 29, while he was vacationing in Villa Langostura. The Clarín Group can now extend its cable network and even annex a handful of radio stations and television channels. Its foray into the telephone market would face no further barrier than having to invest a fair whack of dollars, as the government’s approval process will be mere rubberstamping.
Clarín says that it feels like a dolphin in front of a whale when comparing itself to Telefónica. Measured in terms of invoicing and international profits, the group with its headquarters on Tacuarí Street has a point. Although when it comes to the Argentina’s media market, the equation is precisely inverse. Telefónica’s leadership in telecommunications has been compounded by the fact that Telecom, its only competitor for landlines and one of the three main players in terms of mobile telephones and Internet, was linked to the Spanish giant via its shares in Telecom Italia, ties which lasted from 2007 to mid-2015.
Like Clarín, Telefónica is especially interested in two central objectives of telecommunications “convergence” — namely cable TV and in particular, access to the satellite TV market. For that latter aim it already has the basic infrastructure, the cost of which remains beyond Clarín’s radar and just needs the official permit. But it won’t have it, not in theory anyway. The decree whose full contents were divulged yesterday blocks any radio, TV or telephone concessionaire from exploiting paid satellite TV. As for cable, Telefónica will have to wait until January 1, 2019.
Frustration and incredulity
The company’s mood last night swung between frustration and incredulity as it took in the news, while it warned that the investments promised by the Telefónica group might not be forthcoming. “They’ve pulled the carpet from under us. Who can guarantee that in 2018 or 2019 there won’t be another grace period and we’ll be frozen out again?”, a source from the Spanish company said.
It might be added that the Madrid-based company also had its eye on a third convergence objective — but the previous Cristina Fernández de Kirchner administration had already taken care of that when, using a specious argument, they wiped out the ban on a public service company (for example, Telefónica) being able to exploit a television channel (Telefe, to quote another example).
If we only focus on the big leagues, the lucrative telecommunications market will acquire new dynamism in terms of capital inflow, something which cannot be translated into a better service without greater concentration. Middleweight cable operators such as Supercanal (Grupo Uno) or Telecentro (Pierri) may be sold to or merge with telephone companies. Direct TV (AT&T), which enjoys a tactical alliance with the Clarín Group, will continue being the king of satellite TV. Indalo, Prisa, Cadena 3 and XXIII will not need to relinquish excess licences as required by the law, which the emergency decree is effectively trying to repeal.
Time for tears for many Kirchnerites. They are defending the previous text, which was stranded in the Supreme Court and lower legal spaces for five years, with valuable arguments as to the multiplicity of voices and the social control of communication policies. Fine words contrasting with their arbitrary implementation of the broadcasting legislation, which was a no-holds-barred struggle against the dominant group, paying scant attention to developing the remainder of the law’s clauses.
To come up with this suit, tailor-made for Clarín’s needs, and to replace a law which had been debated for years, Macri resorted to an emergency decree less than 20 days after becoming president. With the Supreme Court’s feeble intervention bid shelved, only the pro-government press can offer its siren songs to institutional quality. The regulatory authority (Ente Nacional de las Comunicaciones) will debut with five Macri delegates out of a total of seven. Any monitoring by public universities, trade unions, indigenous people and civil society was wiped out with the stroke of a pen — it’s now open season for happy hunting.
@sebalacunza