AT&T reportedly mulling sale of Latin American pay TV operations

AT&T is reportedly mulling a possible sale of its pay TV assets in Latin America to help pay down the debt incurred from its planned acquisition of Time Warner, leading to speculation that Liberty Global or Telefónica could emerge as potential buyers.

Reuters, citing unnamed sources, reported at the end of last week that AT&T was working with a financial adviser to evaluate interest in its Latin American assets, which could be valued at over US$8 billion (€6.7 billion).

According to Reuters, AT&T could still decide to keep the assets if no buyer can be found.

AT&T has pay TV operations in Brazil, Colombia, Venezuela, Argentina and some other countries. According to the report, there is no plan to sell the Mexican pay TV operation, which has been investing in wireless services.

AT&T CEO Randall Stephenson, speaking at a Goldman Sachs conference earlier this month, said that the company would be “monetizing assets this year and next” to help pay down its debt.

Potential buyers identified by Reuters’ sources included Liberty Global, Telefónica and Millicom.

Liberty Global is in the process of moving towards spinning off its Latin American and Caribbean arm, LiLAC, later this year. Speaking at the same Goldman Sachs conference, CEO Mike Fries said that the unit would “become a great vehicle for consolidation and the strategic opportunity in the region” and that the group had “a lot of ambition to be a major platform in that region”.

Telefónica is already a major player in pay TV in Latin America, and reported that its platforms in Argentina and Colombia performed well in the second quarter, with some signs of improvement in Peru and Chile against a background of strong competition. However, speaking about Brazil specifically, Ángel Vilá told analysts after the company’s Q2 results that he did not see the need for non-organic moves against a background of healthy revenue and earnings growth. He said Telefónica would “analyse in-market consolidation opportunities if they make sense and create value”.

Mobile operator Millicom has also been growing in the region, including in fixed networks. The company is planning to launch a next-generation TV service in Colombia soon.