The Telecom and Media sectors in Latin America are in a titanic power struggle – deserving of its own soap opera series.

The end prize here is an estimated 400 million or more Latin Americans using computers, smart phones, tablet devices and similar hardware over the next five years. The key players are a pair of outsized billionaire Mexican personalities and the public companies they steer.

America Movil SAB de CV (NYSE:AMX), the Mexican-based wireless telecom behemoth is controlled by Slim. It’s the leading provider of communication services in Latin America and one of the five largest in the world in terms of equity subscribers and market capitalization. Slim’s biggest advantage is having a near monopoly with 70% of the Mexican wireless market and substantial access to capital.

In the other corner is Emilio Azcarraga, who owns Grupo Televisa SA (NYSE:TV) which is best known as the premier television broadcaster. He wants to offer a suite of voice, broadband and television services and is already developing plans to do so.

Grupo Televisa recently acquired a 50% stake in the wireless services provider, Grupo Iusacell for $1.6 billion. The acquisition will enable Grupo Televisa to promote its content to the Grupo Iusacell subscribers (4% of the Mexican mobile market). Grupo Televisa also recently bought the 41.7% stake that it does not currently own in cable television company, Cablemas for MXN 4.7 billion ($397 million). These deals underscore the urgency to build critical mass for competing effectively against a market dominating rival such as America Movil.

But it’s not just a business for two.

Playing the role of antagonists are the Mexican regulators. They denied America Movil’s entry into the television business on its home turf in Mexico, after it outlined aggressive plans double its pay television customer base to 22 million by 2013. Mexico wants to see more competition to keep costs down.

But don’t count anyone out yet. Given the limited penetration for pay television in lucrative Latin American markets, such as a mere 10% for Brazil, there is enough business to go around for these and more vendors in this market.

So, where are other opportunities in this growing area other than these mega television and telecommunications companies?

One company that has been quietly going about its business is Argentina-based e-commerce portal, MercadoLibre, Inc. (NASDAQ:MELI). I feel that MercadoLibre should be a natural beneficiary of the explosive growth anticipated in the Latin American online advertising market (expected to be $4.2 billion in 2014 from $2 billion in 2010). Plus, the company has been able to leverage its strong brand and gain acceptance in markets outside its domestic shores such as Brazil, Mexico and Venezuela. But there are risks in competing directly with the “Titans” for Latin American entertainment dollars.

The risks in broadband include gigantic capital commitments, unanticipated technological developments and changing consumer preferences that can result in quick obsolescence for major industry initiatives. Hopefully these are more than offset by the rewards of capturing the monthly entertainment, communications and information fees from hundreds of millions of new clients.

An interesting sidebar in this general area comes from recent information from the 2010 U.S. census that Hispanic-Americans accounted primarily for the growth in the nation’s population over the past decade. At the end of last year, the Hispanic population constituted 50 million people (16% of the total population) in the United States.

Now, that proportion is set to balloon to an incredible 29% by 2050, a huge market opportunity in my view.

Other U.S.-based broadcasters agree, such as the NBC Universal division of Comcast Corp. (NASDAQ:CMCSK) and the Fox unit of News Corp. (NASDAQ:NWSA). They have moved quickly to attract eyeballs by launching channels that specifically produce content for the Hispanic population.

Consider what would happen if you could combine an attractive Latin American market with the growing U.S. Hispanic market. That’s exactly the dream behind the 2010 Televisa and Univision deal.

Finally, just imagine what happens when MercadoLibre one day announces it can and will stream videos and movies via the internet. Or that it has a market-dominating online game in Spanish or Portuguese like QuePasa (QPSA). Stay tuned.

That's my take on it. Happy trading!

Rudy

This was another great week with the leading stocks being:

• Gafisa S.A.(NYSE:GFA) +12.9%
• Grupo Financiero Galicia S.A. (NasdaqSC:GGAL) +9.8%
• Vivo Participacoes S.A. (NYSE:VIV) +8.4%
• Brasil Telecom S.A. (NYSE:BTM) +7.2%
• Telesp - Telecomunicacoes de Sao Paulo S.A. (NYSE:TSP) +6.9%