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Cable Technology Feature Article

July 09, 2012

Fitch Claims South American Cablevision is Disputable

By Julie Griffin, Contributing Writer

The contention surrounding cable television in the U.S. dims in comparison to the situation surrounding cable television south of the border, as indicated by Fitch’s recent ratings of a prominent South American cable television network.

Less than a couple of weeks after Fitch declared that South American Cablevision (SA) has an overall stable outlook, the global rating agency rescinded that rating and instead deemed the company’s outlook as more deserving of a big, fat “negative.”

Oddly enough, the same circumstances that Fitch used to contrive their “B+ rating” are the same factors that were used when changing it to a not-so-favorable rating. The future of Telemundo has never looked so iffy.

On June 27, a press release issued by Business Wire reported the positive ratings that Fitch gave SA Cablevision as such, “Resilience to global economic stresses, fiscal and monetary discipline in most countries, population growth, and a burgeoning middle class create favorable demand dynamics for infrastructure in Latin America, according to a new Fitch Ratings report.”

“The stable outlook for the region could be adversely affected by a significantly weaker-than-anticipated,” it continued.

But judging from the swift change of ratings, the “global economy, financial volatility and government intervention” either came rather quickly or there some outstanding oversight, on behalf of the ratings provider.

On July 5, Reuters (News - Alert) reports that Fitch changed their outlook of the company and this stems from a series of factors involving Argentina’s political climate, the company’s outstanding debt of $648 million, as well as, “ongoing weak and hostile regulatory framework [which] has already prevented the company to achieve its goals in terms of service clustering and triple play offering, affecting its business model and growth potential.”

A snapshot of Cablevision S.A. by Business Week indicates that the company’s network passes through 3.5 million homes in the greater Bueno Aires area and through northern Argentina. 

Want to learn more about the growing communications opportunities in Latin America? Then be sure to attend
LatinComm Conference & Expo taking place Oct. 2-5, in Austin, TX. The LatinComm Conference& Expo is designed to provide the tools necessary to develop Latin American business strategies and successful partnerships. Professionals from North and South America will be given the opportunity to network in a relaxed atmosphere in Austin Texas at ITEXPO (News - Alert) West.For more information on registering for the SUITS LatinComm Conference & Expo, click here.

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Edited by Braden Becker

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