Cablevision and Fintelco Joint Venture
Continental Cablevision Inc. / Fintelco Case StudyThe Argentinian Market and FintelcoArgentina represents a strong opportunity for Continental. It is the second largest country in Latin America and boasts a relatively healthy economy to go along with a cable industry that is poised for growth and highly deregulated. Additionally, the Argentinian government plans to open the telephony market to competition and to allow existing telephone companies to produce cable programming. This is seen as a potential major driver of the cable industry and another reason to get in on the action before the opportunity is marginalized by new competition. Grabbing a stake in international markets ahead of fellow American competitors would also be a wise move for Continental, given the acquisition is rightly valued. There are two primary factors driving US cable companies’ interest in overseas ventures. The first is the maturation of the domestic cable industry. Cable television household penetration is estimated at 62% (1994) and costs involved with acquiring new systems locally are steadily rising. Conducting new business overseas is enticing due to relatively virgin markets and far lower costs of operation. Secondly, and piling on to the effects felt by rising costs, is the passage of the 1992 Cable Act which places a limit on raising cable rates.

All things considered, Fintelco is an appropriate partner. It is one of the four major MSOs in Argentina and is uniquely positioned with majority market share in several major Argentine cities. This position would be further strengthened by an injection of capital to acquire local television and cable programming companies. Its leadership shares many of the same values and strategies (cluster distribution) as Continentals’. There is a rare amount of trust and compatibility between the two companies’ CEOs which is reflected in the proposed 50/50 split.Major Opportunities and RisksThe opportunities for Continental, who had previously only operated privately in the United States, in this potentially lucrative merger with Fintelco appear plentiful from the onset of the deal. By having greater access to capital markets and funding, the two companies can gain access to new markets and distribution networks, increasing their capacity significantly in implementing their shared “clustering” strategy. The Argentinian government’s deregulation of the cable industry as a whole could allow Continental to gain a much stronger foothold and a larger portion of market share than they could ever gain by themselves in the American market. Finally, Argentina’s emerging telephony and wireless-cable market could be potentially create a major increase in value of the entire Argentinian cable market, which could create an extremely profitable, heavy growth period ripe for Continental and Fintelco to take advantage of in future periods.

Get Your Essay

Cite this page

Fintelco Case Studythe Argentinian Market And Potential Major Driver Of The Cable Industry. (July 4, 2021). Retrieved from https://www.freeessays.education/fintelco-case-studythe-argentinian-market-and-potential-major-driver-of-the-cable-industry-essay/