Telmex Awaiting Greenlight for Pay TV Concession


Mexico City -- Telmex, the telco owned by Mexican billionaire Carlos Slim, has won a court ruling that may clear the way for the company to enter the pay TV business.

The judicial decision issued late Wednesday means Mexico's Communications and Transport Ministry has 15 days to decide if it will modify Telmex's concession, allowing it to operate as both a telecom and cable TV outfit.

Slim, the world's richest man, has been attempting to crack Mexico's television market for several years, but the government has banned his fixed-line carrier Telmex from doing so due to competition concerns.

Just last month the antitrust agency here slapped Slim's wireless carrier America Movil with a $1 billion fine for monopolistic practices.

Playing out with all the melodrama of a telenovela, Mexico's telco and media oligarchs have been feuding lately as they encroach on each other's converging markets. As Telmex inches closer to the pay TV industry, networks Televisa and TV Azteca have been stepping up their offerings of bundled video, Internet and phone services.

The plot thickened recently when Slim pulled advertising for his companies on both networks and subsequently filed an antitrust complaint against Mexico's television duopoly claiming it has been colluding to control ad prices.

Longtime rival networks, Televisa and TV Azteca responded by doing the unthinkable: they formed a partnership for an upstart pay TV, mobile phone and high-speed Internet service, which was seen by industry observers as an affront to Slim.

Televisa stands the most to lose should Telmex get the greenlight to enter the pay TV biz. Televisa owns cablers Cablevision, Cablemas, TVI and satcaster Sky Mexico, making the Mexican media giant the dominant player in the market.

Televisa recently filed a complaint with the Federal Competition Commission claiming Slim had injected a significant amount of money into satcaster Dish Mexico. If proven true, it would be considered an illegal investment since Slim is prohibited from entering the television market until he gets approval from regulators.

Telmex said it only handles billing and marketing services for Dish and has had "no participation, neither directly nor indirectly, in Dish Mexico's capital."

And the bickering goes on and on. Stay tuned, this one's not over by a long shot.