Televisa and partners awarded government fiber-option concession in bid to boost competition
By Paul Kiernan
Dow Jones Newswires
Mexico's Communications and Transportation Ministry on Thursday awarded a fiber-optic lease to a consortium backed by media giant Grupo Televisa as the government seeks to loosen billionaire Carlos Slim's grip on the telecommunications market.
The investment group won a 20-year concession to lease 19,457 kilometers of unused fiber-optic capacity from state-run utility Comision Federal de Electricidad (CFE) by submitting the minimum required bid of 883.8 million pesos ($69.3 million), Minister Juan Molinar said at a press conference.
The auction's result came as little surprise given that the consortium - comprising in equal parts Televisa, cable-TV and telecom provider Megacable Holdings and a subsidiary of Spain's Telefonica - was the only bidder vetted by the authorities to participate.
The government auctioned the fiber-optic lease in hopes of bringing more competition to an industry dominated by incumbent fixed-line phone company Telefonos de Mexico, also known as Telmex, and mobile operator America Movil. Both companies are controlled by Slim.
America Movil's Telcel unit had 71 percent of the country's nearly 85 million wireless subscribers at the end of March, while former state monopoly Telmex controls about 82% of the country's 19.3 million fixed-phone lines.
Rivals frequently have to use Telmex's nationwide network to provide phone service to their clients. The fees they pay to connect to the Telmex network have been a source of conflict among carriers for years.
