Uruguay's pay-TV sector lacks competition

Juan Fernandez Gonzalez | 26-11-2013

Despite being among the Latin American countries with the highest rate of pay-TV penetration, Uruguay has a very unequal market, with the lack of competition, especially in direct-to-home (DTH) services, making pay-tv beyond the reach of those living in the interior and those with a lower income.

According to the latest report from Convergencia Research, reported in El Observador, Uruguay has a 40% pay-TV penetration rate and the second highest prices in the region, after Venezuela. The market, controlled by three big media groups which own most of the free-to-air channels and pay-TV operators, suffers from a lack of competition which has led to high prices and low investment away from the big cities, where most of the population is concentrated.

The media groups Cardoso-Pombo, Romay and Fontaina-DeFeo dominate the market. In Montevideo the operators share the network and each one operates in different areas. Clarín's Cablevision operates in the capital's surroundings, as does DirecTV, which has shown great growth in the last year. According to the research, in Montevideo there is a potential market of 100,000 additional customers.

The analysis points clearly to the need to bring more operators into the market, especially to the satellite TV sector. According to Convergencia Research, DTH is not becoming an alternative for remote or lower income areas, as it has done in other Latin American countries. Only Ñande Tanga is operating in the rural areas, while DirecTV offers DTH in the cities.

This limitation presents a barrier for the future development of pay-TV in the country. According to the research, by 2017 the penetration rate will be 49%, taking Uruguay out of the top three in the region for the first time.