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March 8, 2010
Growth at DTH pay-TV operator Sky is slowing in Central America and the Dominican Republic. Late last month, Televisa reported operational numbers for Sky, in which it holds a controlling stake. For Q4 2009, Sky reported a net addition of just 3,000 subscribers, closing 2009 with 137,000 connections (see Exhibit 1). The shrinking number of net adds reflects how challenging the pay-TV market has become in Central America, particularly for an operator such as Sky that doesn’t have the advantage of bundling services.
Exhibit: Sky’s subscribers in Central America and the Dominican Republic, 2009
Source: Televisa
Sky targets high-end clients; its hook is its exclusive rights to broadcast the complete season of La Liga, the Spanish soccer league. The problem Sky faces in Honduras and other Central American markets is that these high-end subscribers already have a pay-TV subscription and very likely a broadband connection as well, and it is asking them to switch provider and sometimes pay more: the basic Sky package costs $32 in Honduras, compared with a similar $18 package from Claro. A $14 premium to get La Liga along with a few other benefits seems steep and explains why it’s been difficult for Sky to achieve uptake. The declining number of net adds reflects that the addressable target market is about to run out.
As we described in our Honduras Country Intelligence Report, DTH connections represent only around 12% of total pay-TV connections in the country. However, Sky could consider widening its target market with prepaid services, using the advantages of its technology to reach remote areas at a lower cost than cable. If it chooses this route, Sky must consider strategic questions such as how different the prepaid business model is, the cost of providing customer service to a larger number of subscribers and the upfront costs of devices.
— Jose Magana, Analyst
Related resources:
Honduras: Operators Pin Hopes on Broadband and Mobile Data Services
Country Intelligence Report published February 2010
Despite recent political problems in Honduras, the telecommunications market has continued its expansion fueled by advances in mobile penetration and broadband Internet. In 2009, the telecommunications market generated $658m and will expand at a CAGR of 5.8% over the next five years. We anticipate that the rapid shift from fixed telephony to mobile will continue since the state-owned fixed operator will still struggle to add lines. Mobile data will expand at a CAGR of 23.2% to generate $285m by 2014. This Country Intelligence Report analyzes Honduras’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
Latin America Media Forecasts
Forecasts published quarterly
With telcos and mobile operators increasingly offering TV and video services, Pyramid Research’s Media Forecasts are designed to provide competitive intelligence on the pay-TV and mobile TV dynamics for 60 countries as well as regionally and globally. The Media Forecasts track demand patterns for free and paid TV services over terrestrial, satellite and mobile platforms worldwide, providing market share information at both the technology and operator levels as well as five-year adoption and revenue projections. Data from these Forecasts is available online for subscribers to our DataTracker service.
Global Media Forecast
Forecasts updated quarterly
With telcos and mobile operators increasingly offering TV and video services, Pyramid Research’s Media Forecasts are designed to provide competitive intelligence on the pay-TV and mobile TV dynamics for 60 countries as well as at a regional level. The Media Forecasts track demand patterns for free and paid TV services over terrestrial, satellite and mobile platforms worldwide, providing market share information at both the technology and operator levels as well as five-year adoption and revenue projections. Data from these Forecasts is available online for subscribers to our DataTracker service.
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