GLA Eyeing Plan to Restructure Partnerships


Direct-to-home platform Galaxy Latin America may modify its
local-partnership structure, company president George Foyo said.

The panregional DTH operator, which markets DirecTV in
Latin America, is considering a plan that would give it greater control over its local

"What we may end up doing is consolidating
partnerships at the GLA level so that our partners will have equity at a panregional
level, rather than a local level. We want to simplify our business model," Foyo said.

GLA is majority owned by Hughes Electronics Corp., with the
remaining equity held by Venezuela's Cisneros Group of Cos.

A handful of local players own equity stakes in GLA's
in-country operations. Among them are Argentine media giant Grupo Clarín, Chilean MSO VTR
S.A. and Mexico's Grupo MVS, owner of wireless cable operator and programming company
MVS Multivisión. GLA also has local affiliates in Ecuador, Central America and the

But are the local partners looking to take equity in
GLA's panregional operation? "I'm sure we would consider it," said Jim
Clarke, vice president of regional operations for Latin America/Asia-Pacific at
Denver-based UnitedGlobalCom, which owns Chile's VTR and a number of other cable
properties in the region.

Still, Clarke said, UGC had not yet been approached by GLA.
"We believe in the future of the panregional-distribution business. We are doing it
in cable in the region, so why not in satellite technology?" Clarke said. Executives
at VTR in Chile were unavailable to comment.

The prospect of GLA's Ecuadorian partner elevating to
the panregional level "is interesting," said Andrés Vallejo, one of four local
businessmen who wholly own Galaxy Ecuador S.A.

In the immediate term, however, GLA's Venezuelan unit,
controlled by panregional partner Cisneros, is set to take a 25 percent stake in Galaxy
Ecuador, Vallejo said.

That plan is yet another indication of GLA's desire to
have greater operational control at the local level, where it has been hampered at times.

Conflicts have arisen in cases where local GLA partners
have also been involved in cable. Rivalry between the cable and DTH operations was widely
known to have caused internal friction at Brazilian MSO TVA, GLA's former local
partner in that country and a unit of publishing giant Grupo Abril.

TVA ended up selling its local and regional stakes in GLA
-- a move that was also prompted by financial pressures at the Brazilian company.
Mexico's MVS Multivisión also chose to sell Hughes its 10 percent stake in
GLA's panregional operations, although Grupo MVS has kept a majority stake at the
local level.

GLA's sole panregional competitor is Sky Latin
America, jointly owned by News Corp., Liberty Media International Inc., Organizaçoes
Globo of Brazil and Mexico's Grupo Televisa S.A. GLA and Sky each have about 1
million subscribers.