News

Argentine Interior Fertile for DirecTv

8/16/1998 8:00 PM Eastern

Buenos Aires, Argentina -- The country's rural
interior has often been seen as a dusty backwater when compared with its bustling capital
here.

But Galaxy Latin America doesn't think so. Its DirecTv
direct-to-home service is selling overwhelmingly to subscribers in the interior of
Argentina, where it has less competition from cable.

Since its launch in Argentina June 9, 70 percent of
DirecTv's sales have been in the interior, with the remaining 30 percent in the
outskirts of Buenos Aires, said Marcos Caride, DirecTv's local marketing manager.

In its first months of marketing, DirecTv said it signed up
6,000 subscribers in Argentina. Caride predicted that this figure will jump to 100,000 by
the end of the year. By then, it also hopes to increase its number of retail outlets to
1,000 from the current total of 600.

Argentina is Latin America's most-cabled market, with
penetration of more than 50 percent. But the country's two dominant MSOs --
CableVisión/TCI² and Multicanal -- are highly concentrated in Buenos Aires and its
surrounding metropolitan area, leaving much of the interior to smaller, typically
family-run operations that have limited reach and resources.

DirecTv is a Pan-Latin service backed by U.S.-based Hughes
Electronics Corp., Venezuela's Cisneros Group of Cos., Mexico's MVS Multivisión
and Brazil's Televisao Abril.

The company is harnessing the advertising strength of its
local partner, media powerhouse Grupo Clarín, which owns the country's biggest
newspaper and Multicanal, among other properties.

An Argentina-specific DTH service known as TDH entered the
market in 1996, but its strategy has always been to target the rural, more remote parts of
the country, where cable does not reach or where it is providing a low-quality service. To
date, TDH claims 12,000 subscribers. It remains to seen how well TDH will cope with
competition from DirecTv.

TDH currently offers a total of 48 channels -- 24 video and
24 audio. It has a basic-programming package costing $25 per month, and it charges $349
for equipment.

DirecTv offers 135 channels -- 95 video and 40 audio
services -- which will increase to 170 channels by year's end, Caride said. A
basic-programming package costs $39 per month, while equipment and installation costs
$145, and a one-time connection runs $399.

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