Mexican gov’t publishes new regs

Telcos allowed to enter TV market

MEXICO CITY — The Mexican government on Tuesday published long-awaited regulations that will allow telephone companies to enter the television market and cable operators to offer voice, so-called “triple play” services.

The new regs issued by Mexico’s Communications & Transport Ministry set up a period of implementation that runs into early next year.

Mexico’s cable companies and dominant telecom Telefonos de Mexico (Telmex) had been locked in a lobbying battle with the government for the last couple of years, each side trying to win the upper hand in the new regulatory framework.

Telmex was lobbying to prevent having to pay any concession fee to begin to operate TV services, while cablers were hoping to get a moratorium placed on Telmex that would prevent it from entering the TV market for several years. Telmex remains a near monopoly, providing local phone service to more than 90% of Mexicans.

The government tried to stick to the middle road. It won’t make Telemex wait to enter the TV market longer than other players, but telecom regulator Cofetel will decide what Telmex has to pay the government to offer the services.

The company most likely to benefit from the new regulation is Mexico’s top TV network, Televisa, which owns a majority stake in the nation’s second biggest cabler, Cablevision. Besides counting on new revenue from offering telephone services, a greater number of players entering the cable market could drive up demand for Televisa’s content.

Ana Gabriela Ocejo, an analyst at Scotiabank Inverlat’s brokerage in Mexico City, said an alliance between Telemex and Televisa was likely, although such a powerhouse combo would be subject to approval by Mexico’s antitrust watchdog.

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