News

No Launch Date Seen for Sky Argentina

6/04/2000 8:00 PM Eastern

Buenos Aires, Argentina-Prospects have dimmed for an Argentine direct-to-home platform that counts Liberty Media International and News Corp. among its backers.

The service, Sky Multi-Country Partners, has lost its local affiliate. With no new partner in sight and its launch date long overdue, the pan-regional platform could be forced to single-handedly fork out the $120 million it said it needs in order to launch here.

In a deal worth $5.2 million, Sky acquired the 49 percent it did not already own in its Argentine affiliate from former local partner Publicom S.A., a unit of national telco Telecom Argentina S.A.

For now, Sky has been awkwardly silent about its future in Argentina. Sky Multi-Country Partners president Vicente Diego, who oversees Sky's operations outside of Brazil and Mexico, declined to be interviewed.

In a brief statement, Sky said that for strategic reasons, it could not reveal how Publicom's departure would affect its Argentine launch plans. It said only that its launch date would be "opportunely announced."

Delays in acquiring a license, a yearlong lawsuit by a consumer group and Argentina's nagging recession have forced Sky to keep pushing back its launch date over the past year.

Neither side would publicly say what led to the breakup. But a Telecom official, speaking on condition of anonymity, said the continued delays forced the company to reconsider its investment. "We were worried that if this process dragged on any longer, we'd never be able to catch up with [rival DTH operator] DirecTV."

Sky said Telecom's departure stemmed from a change in corporate strategy.

It was unclear whether Sky was prepared to launch in Argentina without a partner, although it did so in Chile. There, it has a three-to-one subscriber advantage over DirecTV.

Sky had figured to inject a new competitive spirit into Argentina's DTH market, which is dominated by DirecTV, with more than 120,000 subscribers. The other DTH competitor is Argentina-specific platform Televisión Directa al Hogar.

The breakup announcement-which was expected for some time by industry sources-coincides with the departure of Sky Argentina CEO Alejandro Martins, who returns to his previous employer, Telecom.

Diego will be interim head of Argentine operations until a replacement for Martins is found.

Despite the breakup, Sky and Telecom remain strategic partners, and they will work on a number of unspecified commercial and distribution projects, Sky said in a news release.

In addition to News Corp. and Liberty, Sky's backers include Mexico's Grupo Televisa S.A. and Brazil's Organizaçoes Globo.

Sky has about 1 million subscribers in four Latin American countries, while DirecTV has a similar number of subscribers spread across 20 markets in the region.

September