The Wall Street Journal-20080206-Televisa Markets Prepaid Cards

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Televisa Markets Prepaid Cards

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Mexican media company Grupo Televisa SAB, moving to snap up customers as greater competition looms in the pay-TV market, last week started selling the country's first prepaid satellite television cards.

Prepaid cards for Sky Mexico, Televisa's satellite service in partnership with DirecTV Group Inc., "use the same payment systems as cellphones, and you only pay for what you use," Televisa said.

The idea comes at a time when the country's telecom and cable companies are implementing "triple play" -- the bundling of Internet, phone and video on the same network.

Televisa unit Empresas Cablevision SAB is among several cable companies that have started offering phone service, while the country's biggest fixed-line phone company, Telefonos de Mexico SAB, or Telmex, plans to start selling video this year.

Marco Rojas, director of marketing at Sky Mexico, said in a telephone interview that the rollout of prepaid television was more than partly motivated by the prospects of increased competition.

"It has a lot to do with it. We're the market leader, we can't sit with our arms crossed. We have to get ahead of the circumstances," Mr. Rojas said.

Sky Mexico is the only satellite-TV provider in the country, although there are around 4.1 million cable-TV subscribers divided among some large firms and several hundred small firms.

With more than 1.5 million subscribers at the end of September, Sky Mexico accounted for a fifth of Televisa's sales in the third quarter of last year.

Mr. Rojas said the prepaid system targets what the company sees as a large, unserved market that wants pay television, but avoids the long- term commitment that a contract involves.

After paying about $200 for the satellite equipment and installation fee, users will be able to buy viewing time by the week, two weeks, or month, choosing between two packages of programs.

Mr. Rojas said the company's aim to sign up 50,000 prepaid subscribers in 2008 looks conservative judging on initial reaction to the plan. He noted that in Venezuela, a smaller market than Mexico, DirecTV signed up 500,000 customers over five years using the prepaid system.