Grupo Televisa SAB (TV) 2011 Q1 法說會逐字稿

Good morning, everyone, and welcome to Grupo Televisa's First Quarter 2011 Conference Call. Before we begin, I would like to draw your attention to the press release, which explains the use of forward-looking statements and applies to everything we discuss in today's call and in the earnings release. I would now like to turn the call over to Mr. Alfonso de Angoitia, Executive Vice President of Grupo Televisa. Please go ahead, sir.

Thank you, Elsa. Good morning. We are pleased that you have joined us for this discussion of Grupo Televisa's first quarter 2011 results. With me today is Jose Baston, President of Television and Contents, also Salvi Folch, our Chief Financial Officer. I will take you through the highlights of our financial results for the quarter, then Pepe will discuss the operating results of our television segment. And after that, we will be happy to take your questions.

During the first quarter, our consolidated revenue increased 8.7% to MXN13.2 billion and our operating segment income grew 10% to MXN4.6 billion. In our television broadcasting business, revenue reached MXN4.1 billion or 1.8% lower than a year ago. As we said in our earnings call -- release, the decline is mostly explained by the absence of Grupo Carso as a client. The macro environment continues to show signs of slow, but steady improvement and we see that reflected in stronger advertising sales to industries such as retail, tourism, automotive and beverages.

Client deposits are up 1.6%, so we are maintaining our full guidance -- full-year guidance of low single-digit growth in revenue for this business segment. Operating segment income was MXN1.4 billion and the margin was 34.8%. The drop in the margin during the quarter is larger than our full year guidance of negative 110 basis points and it's explained mainly by the loss of this single client.

Additionally, certain days of the holy week in 2010 took place during the first quarter and because less people watched television on those days, we can broadcast reruns and reduce our costs and expenses. This translated into a difficult comparison to other quarters. Total revenue in our pay television network segment reached MXN768 million, representing growth of 9.5% during the quarter and operating segment income was MXN361 million, resulting in growth of 9.7% and a margin of 47%.

This business segment continues to benefit from the success of its channel offering, the continued growth in pay television penetration and stronger advertising revenues in this platform. Total revenue in our programming exports business reached MXN790 million, a growth of 19.7% from last year. And operating segment income reached MXN367 million. And the margin was 46.5%.

The growth in the segment is explained primarily by an increase in new division royalties of 41.6% to $46.5 million and by strong revenue growth in Europe, partially offset by the peso appreciation during the quarter. Publishing revenue dropped 11.1% to MXN610 million from last year and operating segment income reached MXN20 million. The decline in revenues is explained by an unfavorable comparison with the same quarter last year, given the publishing of the soccer World Cup album and the closing of a number of unprofitable titles as part of the restructuring of this business.

This business segment, this is publishing, was also hit by the Carso effect. We concluded the quarter with [150] paid titles. Sky's revenue grew by 14.5% to MXN3 billion and total subscriber additions reached 268,000, closing the quarter with 3.3 million. Operating segment income reached MXN1.4 billion and the margin was 47.1%. The margin increase was explained partly by the fact that during the first quarter of last year, Sky amortized certain costs related to the transmission of the World Cup. We also saw strong margins as a result of the continued success of our low-cost paid television offering.

Revenue in our cable and telecom segment grew 17.9%, reaching MXN3.2 billion. Operating segment income was MXN1.1 billion and the margin reached 33.1%. Our cable business continues to benefit from the attractive triple-play offerings that we launched with [Mayacablee]. The three cable companies added, in the quarter, 120,000 RGUs or revenue generating units, of which 39% were data subscribers and 27% were voice subscribers. The penetration of data to video subscribers is now 42% versus 38% of last year and that of voice to video subscribers is now 27% versus 22% a year ago. As such, the average number of services per subscriber reached 1.7 during the quarter.

Our other business segment delivered strong growth of 18%, reaching MXN950 million. Gaming and Televisa soccer teams performed well during the quarter. Our gaming business benefited from the success of our format [Menagol] and the launch of a new game. During the first quarter, we started to consolidate the financial results of our soccer team, which normally carry an operating loss and explains, in part, a negative operating segment income of MXN66 million. Our total CapEx for the quarter was $144 million, in line with our full year guidance of $150 million (Sic- Q4 2010 transcript). Our net debt position at March 31st was MXN13.2 billion.

Now, let's talk about our most recent investment. As you know, last week, we announced an investment of $1.6 billion into IUSACELL, equivalent to, upon regulatory approval, a 50% equity participation. This transaction is in line with Televisa's strategic plan to diversify its business and a critical part of our effort to transform a traditional media company into an integrated media and telco operator. As part of this strategy, we made an initial investment in Cablemas, Mexico's second largest cable system, followed by a number of deals in the cable industry.

We also acquired a 50 -- a [5,030] mile long fiber backbone and created a consortium to explore approximately 14,000 miles of national fiber network owned by the electricity commission. As part of this strategy, just a couple of weeks ago, we concluded the transaction, by which we increased our equity stake to 100% of Cablemas. Today, as a result of our diversification strategy into telco, we have over 5 million media subscribers, provide fixed line telephony services to close to 530,000 customers and over 850,000 homes receive Internet access via our cable assets.

As a result, our telco segment represented, in 2010, close to 40% of both our revenues and EBITDA compared to less than 5% back in 2003. By executing our diversification strategy, we have been able to access the telco industry that is worth $24 billion in terms of sales. That's five times the size of Mexico's advertising industry. The telecommunications industry is expected to reach $35 billion by 2015 and much of that growth will come from mobile data.

The IUSACELL deal is in line with our interest in participating in Mexico's growing mobile industry, which has remained a priority since we announced it back in February of last year. As in many other parts of the world, the mobile data industry has yet to be developed in Mexico, where it is expected to grow at a compounded annual growth rate of 23% through 2015. As a result, it is expected that in just three years, mobile data revenues will exceed those of fixed data. Our extensive base of video, voice and data customers will be a very good starting point.

Yes, it is a capital intensive industry, but we have already developed a very large infrastructure base. For example, we have access to more than 50,000 miles of fiber and coaxial cable throughout the country. As I mentioned, we now have more than 5 million pay television households and growing. This is equivalent to more than 15 million potential wireless customers. And we also have the largest marketing and content platform in the country.

We look for ways to leverage these assets to advance the efforts of our new company, IUSACELL. A wireless operator, with more than 4 million subscribers, IUSACELL has a very significant amount of spectrum in Mexico, an amount comparable to that of the market leader. In addition, IUSACELL has plenty of infrastructure including 5,000 miles of fiber and more than 1,000 points of sale and generates close $1 billion in annual revenue. Furthermore, this will be a company with access to $1.6 billion in fresh capital, the large majority of which will be used to fund operating and capital expenditures.

We estimate that this amount will be sufficient to fund an ambitious, yet achievable, business plan. Accordingly, we do not contemplate making, nor are we obligated, to make additional capital investments. IUSACELL is a very different company today. Until recently, management's efforts have been focused on restructuring its balance sheet. This was a long and exhausting process that left little time or capital to focus on growth and profitability.

With a strong balance sheet, a strong cash position and new and experienced management team and a firm commitment by its two shareholders on delivering results, the prospects for the company are very promising. In the next couple of years, we will be capital intensive for IUSACELL. But IUSACELL will start with a solid war chest. We have no doubt that IUSACELL's focus on growth and profitability will be reflected in better services for the end-user.

We will be running IUSACELL together with Grupo Salinas. It will be a true 50/50 venture in which all key decisions will be reached by consensus. We will both have equal representation on the Board. And while we have agreed to a customary dispute resolution mechanism in the [worst] closet, our goal is to build a very successful wireless operator.

We know Grupo Salinas well and maintain a highly institutional relationship with them. We compete for every single rating point in television. The competition is intense and it will continue to be so. But in IUSACELL, a separate and fully independent operation, our intent -- incentives are perfectly aligned. We both want a highly successful mobile venture and we both want to multiply the value of our investment. We have different management styles and IUSACELL will benefit from the best that each of us has to contribute.

On another subject, I would like to inform you that yesterday our Board approved a proposal to pay a dividend of MXN0.35 per CPO on March 31st, in line with our dividend policies. Thank you very much for your time and attention and I'll turn the call over to Pepe.

Thank you, Alfonso. Good morning, everyone. Our content continued to provide the same, consistency in quality and reach that it is well-known for. In our television broadcasting segment, our goals in terms of audience share and ratings continued to be met. During the first quarter, our prime time ratings on channel two, our main broadcast network, were the highest of the last 12 months. Among other measures taken, we now broadcast the finale of the Telenovelas on Sunday, during prime time. This has proven to be a good strategy.

For example, the finale of our Telenovela Teresa garnered a 53% audience share and almost triple the average revenues of the time slot. As Alfonso mentioned, our pay TV network segment continues to deliver very strong growth. As we reported, starting in 2011, we are no longer consolidating the results of TuTeve, our joint venture with Univision, for pay TV networks in the United States. Our 50% participation in this venture was contributed to Univision as part of the recent transaction. This means that excluding TuTeve's contribution to 2010 results, the growth in revenues and operating segment income is 19.2% and 20.7% respectively.

Our large advertising inventory, our reach beyond Mexico and the continued success of our networks are allowing for this business segment to grow at a faster pace than of the pay TV platforms in Mexico. The prospects for this business segment continue to be very encouraging. This quarter, our programming exports business showed, for the first time, the benefit of our new agreement with Univision, although it has yet to show its true potential -- although it has yet to show its full potential.

Univision royalties increased by 41.3% from $32 million in the first quarter of 2010 to $46.5 million in the first quarter of 2011. The increase reflects a higher royalty rate on our large base. But it is also showing -- it also shows the growing success of Univision.

Our Telenovelas continue to be among the most watched programs in the United States, regardless of language. For example, our one-hour premier of our Telenovela Teresa made Univision the number two network in the nine to ten PM time slot, among both men and women ages 18 to 34. This places Univision behind Fox, but ahead of NBC, CBS, ABC and CW.

During the quarter, Univision delivered more viewers ages 18 to 34 than the first four episodes of ABC's Mr. Sunshine, NBC's Law and Order SVU and the entire line up of CBS, which included Survivor and Criminal Minds. The strong ratings, combined with the most recent census figures are sure to help Univision in its focus to continue growing in each revenue base.

The recently released census figures, reaffirm the power of the US Hispanic market, more than 50 million Hispanics now make up over 60% of the United States population. Since 2000, the Hispanic population accounted for 65% of all growth in the United States, growing four times faster than the US population. The relevance and power of this segment of the population could not be more clear. And there is no better vehicle to reach this market than Univision.

The prospect for Univision in the US looks brighter every day. And not just because of the size of its relevant market keeps getting bigger and bigger. Earlier this week, Univision announced that it plans to launch three new pay TV network in the next 18 months. Its dedicated Telenovela, sports and news cable channels are sure to be welcomed with open arms by the Hispanic community.

With regards to our interactive media business, we continue to make progress with this implementation of our digital strategy. Among other steps, we are redesigning our site, televisa.com and plan to relaunch -- to launch it in the new few weeks. We are also strengthening our transmedia efforts to make sure that we deliver all of our products across all possible platforms.

Finally, we are working hard on determining the right content for mobile distribution. We will make sure that we deliver and monetize our content in the most efficient way possible. The mobile content market is not just developed in Mexico and Latin American markets. We -- what we know is that with the success of our content and [average] the strategic alliances in the region, we can lead this growth. Thank you so much for your attention and we are now happy to take your questions.

(Operator Instructions). Your first question is from Rodrigo Villanueva of Bank of America.

Hi. Good morning. My question is regarding your recent acquisition on IUSACELL. I was wondering if you could share with us what is the regulatory time frame to close a deal. When do you expect to begin to manage the company? And finally, how are we going to be able to measure the improvement of IUSACELL's performance? Thank you.

Hi, Rodrigo. The conversion of the ventures that we bought has to be approved by the antitrust commission. We have made a filing. We expect it to take about six months for this to be approved. So that is the time frame in which we expect to get the approval. And then we will start working with our partners and we will make the changes at the Board level, etcetera. And I'm sorry, I didn't get your last question?

Sure. Given that while IUSACELL is not a listed company anymore, and that probably you won't be consolidating it in full, I was wondering how are we going to be able to measure the operating improvement of IUSACELL after you start to manage the firm?

Yes. Well, you are right. We are not going to consolidate it. So, of course, we'll inform the market as to those developments going on at IUSACELL. So we'll be reporting, basically, what is going on with our investment in IUSACELL.

Okay. Thank you very much. Another question, if I may. I was wondering if you could share with us, if you managed to increase television advertising prices in 2011? And if so, I was wondering if you could tell us more or less by how much? Thank you.

Well, as we have reported in the past, what we are going to -- we have already done some increasing in the rate. But we are going to stick in our guidance of revenue and also of EBITDA margin for the television segment.

Okay. Thank you very much.

Your next question is from James Rivett of Citi.

Yes. Good morning, guys. Two questions, if I can. I would perhaps like to hear from you a little bit more on the rationale for what makes you comfortable paying what looks like what could be a very high price for the stake in IUSACELL. Is there any sort of details you can give us around that? And my second question is, does the IUSACELL deal mean that we should think any further consolidation of the cable market or any further acquisitions are kind of off the table for the next 12 to 18 months or so? Thank you.

Yes. Hi. Well, as I mentioned before, let me take a step back to the rationale of -- behind the IUSACELL deal. As you know, I mean, we have, for the past five years, been consolidating the cable industry and participating more actively in that industry. We have put a lot of effort into transforming Televisa, which was a traditional media company, but with slow growth into an integrated media and telco operator. As you have seen, most of our growth is coming from that segment.

Since then, telco has become a very important part of our efforts and of our strategy. And I would say that just in a few years, we have been able to capture millions of subscribers of basically triple-play services, video, voice and broadband. We have also built, in those years, a telecommunications network throughout Mexico that exceeds, I'd say, 50,000 miles of fiber and coaxial cable. So this has been our most important strategy, together with the growth of the US Hispanic market in Univision.

So I would say that now we are a large and growing player in the telco market. As I mentioned before, it is a market of $24 billion that is expected to grow to $35 billion by 2015. It's the largest industry in Mexico, by far. And participating in the mobile business is a very important piece of this strategy. Now, 60% of those $24 billion comes from mobile and we believe that that percentage is going to expand.

So there's no penetration of smartphones in Mexico. And there's a lot of demand for mobile broadband services. So we think that there's a big opportunity for the mobile market. If you look at analysts' reports, we have -- they estimate that broadband services are expected to grow at 30 -- 23% compounded over the next five years. So we think that this is a great opportunity for the company. We will participate actively and I -- we believe that IUSACELL is positioned to grow aggressively. It owns very good spectrum, which is scarce, of course.

It has the infrastructure. It has the national sales force and also a recognized brand. So I think that we will be able to put together a very attractive offer for the end-users, especially because this company, IUSACELL, will receive the full support of its two shareholders, which now are [Grupo Televisa] and Salinas, Grupo Salinas. We will have a fully funded business plan, which this company didn't have before, and as a result of that, could not grow. And we're going to leverage, of course, on our combined assets.

Look at the combined assets that IUSACELL will be able to leverage on. This includes all our cable companies, Sky, the fiber optic network, [Azteca,] over their advertising and Televisa's, over-the-air advertising in Television Azteca, over 5 million subscribers of our services. So IUSACELL, I think, will have a unique opportunity to grab a share of this 24 and growing billion dollar market. I also believe that Televisa and Grupo Salinas, together, can make a difference in leveling the playing field in the telecommunications industry in Mexico.

So I think that we can really make a difference together and I am not sure whether we could change certain things in the telecommunications industry, if we were to do it by ourselves. So that's basically the rationale behind it. It's part of our strategy to develop into a telecommunications and media integrator, operator.

The price might look expensive now, if you look at the numbers and past performance of the company. But we're buying an ongoing 4G operator with great spectrum, which as I mentioned, of course, is a scarce asset. And it's a huge opportunity to grow in a $24 billion market. So we believe that we can make a difference together with Grupo Salinas. This will be a new IUSACELL with a fully funded business plan, which I have -- as I mentioned before, this was not the case for many, many years, new management and the full support of Grupo Televisa and Grupo Salinas, with all of our assets.

Great. Can I just ask a follow-up on that?

Let me --

Sorry. Alfonso de Angoitia: Just let me finish. As to the last part of your question, we'll continue to seek opportunities in the cable industry. If opportunities come up, to consolidate the whole industry, as we have always mentioned, I think it makes a lot of sense to form the national cable company, with all the synergies involved in doing that. And the efficiencies. We will continue to pursue that actively.

Very clear. Could I just ask a few follow-ups on IUSACELL? The first is, what sort of level of subscriber take-up from your existing 5 million customers would you consider to be a success? And secondly, just to clarify, I think you said this. But there is no way, in your business plan right now, that Televisa's going to have to put more capital into this business. Correct?

Yes, that's correct, as to your last point. We don't foresee putting more money into IUSACELL business plan. That is quite aggressive and it's fully funded. We won't -- we are not foreseeing putting any money into it and we're not obligated to put any money into it. As to success, in terms of subscribers, of course, for competitive reasons, and because of the conflicts that are ongoing in Mexico, in the telecommunications sector, I would not like to share more about our strategy, but what I would share with you, as to what we consider a success of this venture of IUSACELL, is that -- first of all, that we are able to achieve a good relationship with our partner, Grupo Salinas. Also we would consider a success if we can use all of Televisa's and Grupo Salinas's assets to grow IUSACELL and to especially grow its subscriber base.

I would also mention that the success of this venture, if it can offer high quality services, especially broadband services at attractive prices to Mexican consumers. And, of course, a success also would be to increase the profitability of the Company in a way that creates value to our shareholders.

Thank you very much.

Thank you.

The next question is from the line of Juan Moctezuma of Credit Suisse.

Hi. Good morning. Thanks for the call. I have a couple of questions. The first one, in terms of DTH. How is competition with dish? And for how long do you expect this strong subscriber growth to continue to this -- in Sky, sorry? And the second one is regarding the other segments, I was wondering if you could provide a bit more color here as we have seen very good growth in revenues and I was wondering when you can see an increase in the profitability levels. Thanks.

Well, you asked to DTH and our Sky operation in Mexico. We are competing against dish in the lower-tier package. As you have seen, we have tremendous growth year-over-year in that package, which will continue to grow. I think that in DTH and our Sky venture, will continue to grow in the following quarters and in the following years. And as you saw, we had a great improvement in terms of EBITDA margins. So we are extremely happy with the performance that Sky has had. I didn't get your last point because I could not hear that clearly.

Oh, yes, it's regarding the other segments. We have seen a very good growth in revenues and I was just wondering, when could we see also an uplift in profitability level?

Yes. I think the profitability level of other businesses have to do, in this quarter in particular, with the consolidation of two of our soccer teams, which were not consolidated. So that affected profitability. So going forward, as our gaming business improves, which is beginning and this business is beginning to improve, both on the bingo partner side and on the lottery business, that will make a difference in that segment. Of course, the soccer teams cost us money, so we have to improve that as well. And it will take some time.

Okay. Thank you very much.

The next question is from Tomas Lajous of UBS.

Good morning, gentlemen. Thank you for the call. I actually have two questions, one for Alfonso and one for Pepe. So, Alfonso, on IUSACELL, just trying to put numbers to this all. Can you tell us what that balance is for IUSACELL post the [Concluso American] deal on the one hand? And on the other, what sort of specific targets are you looking for? Are you looking for EBITDA of $700 million by 2015? What should we be looking for as the milestones that you see as achievable and that justify the investment?

And then for Pepe, if you can talk a little bit about the production that you've been getting into in the first quarter, obviously raised your costs vis-a-vis last year, because of [San Menasanta], but if you can talk about something, what's exciting on you, for the pipeline and whether there is anything that can then further leverage the investment in IUSACELL? Are you working on digital content for mobile services and what are the plans for that?

Yes, hi, Tomas. As to IUSACELL's debt at closing, after their restructuring in the Conclusa American deal, total debt is approximately $850 million. As to EBITDA margins, I would say that over the first couple of years, IUSACELL will be entering into a heavy investment phase. Then due to the nature of that business -- of that industry, where handsets are accounted for as operating rather than CapEx, EBITDA margins will continue in the next couple of years, depressed. However, over the near, medium term, we would expect IUSACELL to reach margins typical of the industry.

Hi, Tomas. Based our content and basically talking about the first quarter, but in some ways talking about the whole year, we are very, very comfortable to have the same quality of content and results, of course, not just in Mexico, but also the division -- the new division as well as our Latin American markets, where mostly -- most of our revenues come from. We have seen the results already in the planning that we started a long time ago, and even about five years ago, because of all the alliances that we have, strategic alliances, with all the main writers, worldwide, of Telenovelas, mostly.

So we feel very comfortable to have already consolidated this on a long-term basis, mining the relationships with the, like I said, with most of the most important assets that you need to be able to have a great success in the Telenovela as well as on the other providers, which means basically formats that we can produce in Mexico in the near future as well as in the long term. But the relationships are on a long-term basis. And we are already consolidating these alliances and already renegotiating more years to be able to try, at least, to have deals for ten years in the area of scripts.

In the area of digital content, we have been planning this, as you know, for a very long time. We are in the process of starting to put what is it that works and what is it that doesn't work as well. And we have seen that most of the great results are based on transmedia, of course, based on the great success that we have had on broadcasts as well as on pay TV productions.

As we speak, we are already developing strategies with our new partner, IUSACELL, and we see that we will be able to make a very, very big difference with our competitors in the mobile industry, because of not just Vodafone, but selling the promotional site of both companies, [Minimum Staka] and Televisa, but also in the power that Televisa content has to be able to give exclusive -- giving exclusive areas of content to our mobile partner.

Okay. Thank you. Thank you very much, gentlemen.

Your next question is from David Joyce of Miller, Tabak & Company.

Thank you. One of the points of clarification I was looking for is what the -- sort of how you compare and contrast the potential Nextel investment from last year versus IUSACELL. You see more upside of getting more commercial subscribers, eventually, on the IUSACELL platform and is that part of your diversification strategy, to get more away from just residential customers to more consumers?

Yes, hi, David. Well, the IUSACELL deal is very different than the one that we had with Nextel. In this transaction, we're buying 50% of the company that is operating a 4G technology business.

They own a substantial amount of spectrum. This is IUSACELL. So basically at IUSACELL, we have capital and new management to develop a successful business. And that's what I think we'll be providing. So of course, Nextel is a great company that operates push-to-talk in Mexico and as we know, they will be migrating into 3G and 4G. And Nextel also has a great management team. But IUSACELL is a completely different deal. Of course, in the IUSACELL deal, it will be 50% ownership by us. We will leverage on all the assets, as I mentioned before, that we have and that Grupo Salinas has to make this a success.

Thanks. And on your satellite and cable and telco new businesses, you've done great in growing subscribers. Could you provide some color as to whether -- how much -- how many of those are coming from competitors versus those who are new to those platforms?

Yes, I would say that most customers are new customers. As you can see from the numbers, penetration of pay television services in Mexico is still very low, if you compare it to other parts of the world. As the Mexican economy improves, we will see growth, not only of pay television services, but also of broadband access and telephony. As you can also see, in the numbers, we have made huge investments in our three cable companies and we have grown the networks and expanded the networks and homes passed have also seen a dramatic increase. So I think we're well positioned as the Mexican economy improves to get and to continue growing, in terms of subscribers.

Great. Thank you.

The next question is from Enrique Gomez of HSBC.

Yes, thank you. Good morning, gentlemen. My -- two questions. First, regarding Televisa's overall strategy, you've now secured access to the US Hispanic population. Now with IUSACELL, you have secure access to the wireless market and you continue to consolidate cable, as you mentioned. Would it be fair to say that you would now -- Televisa would most -- would -- its main focus would be concentrated on operating these businesses? Or is there something else on your radar that we should be aware of? And along those lines, my second question is, IUSACELL has a fiber-to-the-home subsidiary, total play, which will compete with your cable companies. IF you could provide some color on what's your plan for that subsidiary. Thank you.

Yes, Enrique. Well, as we have mentioned, for the last five years, we have been consolidating cable and growing our network throughout the country, with 50,000 miles of fiber and coaxial cable that we now have. So in essence, it was a strategy to transform Televisa from a traditional media company into an integrated media and telecommunications operator. I think we're on the right path of doing that.

And we will continue to focus on running a very successful -- the most successful, I would say, Hispanic media company in the world. And also, in consolidating cable and now making IUSACELL a success. Those are our top priorities. This is operating, as I mentioned, a great media company, with now an investment in Univision and growing royalty coming from Univision. And also, continued to consolidate cable and make IUSACELL a success.

I think we have the assets to make IUSACELL a success, as I have been mentioning. And of course it will take some time. As to your last point, which is total play. You're right. Total play -- IUSACELL is a total play service offering, fiber-to-the-home. And that company will, in fact, compete with, basically, cable. However, this is a service that will be -- it's going to be a highly attractive service because it's fiber-to-the-home. But it's going after the highest end of the market. So we believe that it's like, for us, having Sky competing with cable and now we'll have a third leg, which is fiber-to-the-home via total play competing against those three. Those two.

Okay. Thank you very much.

At this time, there are no further questions. I would now like to hand the floor over to management for any closing remarks.

Well, thank you very much for participating in the call and please give us a call if you have any other questions.

Thank you. This concludes today's Grupo Televisa First Quarter 2011 Conference call. Thank you for your participation. You may now disconnect.