Mexican standoff over cellphones

Billionaire Carlos Slim blacked from airwaves

MEXICO CITY — In a showdown between two of Mexico’s billionaires, Carlos Slim’s Grupo Carso has been cut off from the country’s airwaves.

The latest conflict centers around a battle for Mexico’s highly competitive mobile phone market. In a statement issued Wednesday night, No. 2 web Azteca indicated the dispute was over pricing for phone services from Carso-owned Telmex and Telcel to Azteca owner Ricardo Salinas Pliego.

Telmex and Telcel parent America Movil’s policy on interconnection rates was a “predatory practice that protects its monopoly,” Azteca said in its statement. And until those rates were lowered by Slim’s phone services his other companies will be blanked from Azteca’s airwaves.

Last week Carso pulled its ads from top broadcaster Televisa, leaving the conglom with few places from where to peddle its wares, which include besides phone services, Sanborns restaurant, food chains and other retailers including Sears Mexico.

Some suggested that the move was in part revenge against Televisa after the conglom called on the Federal Competition Commission to investigate Telmex for its investments in low-cost satcaster Dish Network — a potentially illegal partnership given that Telmex does not have regulatory approval to operate as a feevee.

But Carso said it was pulling its Televisa ads because the network was raising fees by 20%. Televisa countered that once its upfront was over the discounts were off the table too.

While the immediate sticking points on the deals are higher rates and a conflict over interconnection rates with a sister mobile services company, UBS Investment Research analyst Tomas Lajous said the attention given to the standoffs ultimately highlights the looming regulatory battle ahead of Telmex’s proposed entry into television.

“Legislators and political commentators have turned the disputes into a regulatory discussion. The key here is the continued government-led blockage for America Movil’s to offer pay-TV/broadcast services,” Lajous said. “We retain the view that this should come through in 2011 or 2012, and change the landscape for all.”

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