Mexico Set to Open Up TV, Telcos to Foreign Firms

NBCU's Telemundo among webs likely to be interested

Mexico Set Open Up TV, Telcos

MEXICO CITY – Mexico President Enrique Pena Nieto presented a legislative package to Congress Monday that could change the face of local TV and the telecommunications industry, including a fast track provision to create two over-the-air networks in an auction open to foreign congloms.

This would open the market to webs like NBCUniversal’s Telemundo, which tried to enter as a third broadcaster in 2006, breaking the Televisa-Azteca duopoly, but was blocked by technicalities related to foreign ownership rules.

Perhaps the biggest surprise is that neither Televisa nor Azteca, which together hold a 95% share in a market of nearly 110 million potential viewers, will be allowed to bid for the new channels.

The bill will also dissolve two existing regulators and establish an autonomous telco regulator dubbed Ifetel that will be able to give and revoke licenses, place sanctions, as well as order the separation of accounts, functions and structure of outlets with an excessively high concentrations.

“The reform is not being done to persecute or damage anyone, but to benefit Mexican society as a whole,” said Manlio Fabio Beltrones, Mexico’s equivalent to the House Majority Leader, at Monday’s event.

Televisa issued a statement welcoming the reform package, saying, “Grupo Televisa has made important investments and has prepared itself to compete now in a more level playing field with the new rules of the game such as those contemplated in the reform.”

The proposed reform is a mixed bag for the world’s richest man, Carlos Slim, the owner of Mexico’s main telephony provider Telmex and its parent company, the world’s largest mobile services company America Movil.

While Telmex has repeatedly said it is not interested in an over-the-air net, Slim has been trying to launch an Internet feevee for years, and the bill looks to clear the way at least partially for him to do so. But the proposed rules would also force Slim to open his networks to competitors, a provision bound to hit his bottom line.