Why DirecTV said that it can lose more than 20% of its customers

A delegation from the multinational DirecTV appeared before the Integrated Budget Commission with Treasury of the Senate to claim the right to offer internet in Uruguay for its clients and warned about the damages generated by the impossibility of offering this service due to the potential loss of some 40 thousand users.

Although in article 206 of the Accountability message sent by the Executive Power to the Deputy, the total repeal of the Media Law was foreseen, a negotiation process was later opened in the government coalition that ended up partially modifying only article 56 of the rule that prevented cable operators from providing internet service (expressly excluding those whose license implies national scope, as is the case of DirecTV).

Until now, only five companies from Canelones, Colonia and Montevideo (TCC, Nuevo Siglo and Monte Cable) were authorized by the Executive Power because they had filed an appeal for unconstitutionality with that article of the Media Law.

DirecTv appeared before Ursec and requested to be granted a class B license and to be authorized to provide the data transmission service in Montevideo. yesHowever, the agency rejected the request.

“Our interest in article 56 and in providing internet services in Uruguay is not new. Already in 2016 we tried, through an unconstitutionality appeal, to provide internet services to Uruguay,” Gianpaolo Peirano told the commission. , one of the DirecTV spokespersons.

The executive indicated that since the Executive Branch agreed to enable internet service for five cable companies in June, there has been a kind of “judicial opening” to obtain those permits.

“Our presentation is quite simple. As I said, DirectTV has been here since 2003, that is, we do not need to demonstrate how serious the company is, the opportunity it deserves to provide Internet service to Uruguayans, or the unequal conditions and injustice that we are experiencing by not being allowed to offer that service. Honestly – I say it very honestly – we are not going to abdicate or reduce our efforts of any kind to, effectively, have that right to provide Internet service. I say very frankly and honestly, looking them in the face,” added Peirano.

The representative of DirecTV reported that since they began to visit the country in June they have met with different authorities. “No one has told us, basically, why DirecTV is denied the right to provide internet service; I have not found any reasonable or fair answer. In many countries there are, suddenly, regulatory conditions of competition that make a service provider tell you that you cannot do it for such a thing, but this is not the case. Honestly, I repeat – with great honesty –, in none of those twenty or thirty meetings that we have had have they given us an answer that convinces us of why why we are denied the right to provide internet service,” questioned Peirano.

The impact

DirecTV currently has some 200,000 customers in the country and employs 120 people directly and another 200 through partners and companies with which it works. In 2021, DirecTV was acquired by the Werthein Group, an Argentine private holding company with more than 100 years of experience, who has experience in many areas of business; telecommunications is one of them, but it also has businesses in areas such as agribusiness, food and beverages, health, insurance, etc.

“DirecTV is the leader in the television market in Uruguay. The television service is present in 56% of Uruguayan households; three years ago we were at 64%, which means that in the last three years 9% of penetration of the service in households. While, for example, the internet is in 8% of households and more, the streaming platform service is in 51% of households; it grew 10% in the last year. This speaks how consumer trends are changing and why we are here today explaining this topic,” explained Silvana Lettieri of DirecTV.

The executive added that the company carried out some market research with its marketing teams to try to understand what will be the willingness of its clients and users of the market in general to contract complementary services or packaged television services with internet.

“For example, in the event that DirecTV offers an internet service in conjunction with its pay television service, 20% of current customers would be attracted by that possibility. But the number is even more striking when we say that there are 25% of users who today do not have the pay television service, who would join this service if we also offer internet. And this number increases a little more when we go to lower socioeconomic segments,” Lettieri said.

However, he warned about the adverse impact it would have when users were asked what would happen in the event that all other pay television operators offered internet in conjunction with their product and DirecTV did not. “We found that 20% or 21% of our clients would abandon the service (about 40,000 users). And that number grows when we talk about younger clients –between 18 and 25 years old, the percentage rises to 33%–; and in the lower socioeconomic segments it is also boosted and reaches 28%.Clearly, this is because the customer has an expectation of improvement in service and price when they are delivered. bundle products or packaged products,” Lettieri explained.

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