UPDATE 4-Mexican court passes Slim TV bid to next government

Sat Jul 7, 2012 12:57am IST

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* Lower court voids bid to enter TV market
    * Slim must start again with license process
    * Test for next government on competition


    By Michael O'Boyle and Elinor Comlay
    MEXICO CITY, July 6 (Reuters) - A Mexican court on Thursday
denied billionaire Carlos Slim's bid to enter the lucrative
television market, handing the next president the task of
increasing competition in the country's closed telecoms and TV
sectors.
    Slim, who controls virtually all of Mexico's mobile and home
phone lines, has been pushing for years to get a piece of the
country's broadcast pie, currently controlled by giants Televisa
 and TV Azteca.
    The court decision is a win for the government, which had
tried to use Slim's desire for TV as leverage to push him to
open up to more competition in the phone market.
    It means Slim's phone company Telmex will have to reapply
from scratch for a TV license, pushing the decision back for
months and possibly years and passing the buck to Enrique Pena
Nieto of the opposition Institutional Revolutionary Party (PRI),
who won Sunday's presidential election.
    A Telmex official said the company would not comment on the
ruling.
    "The next administration has a golden opportunity to start
from the beginning and send signals that they will be neutral,"
said Carlos Ramirez, analyst at Eurasia Group in Washington. 
     Pena Nieto, a 45-year-old former state governor married to
a Televisa soap opera star, has been accused by critics of being
close to the major broadcaster. 
    "Pena Nieto will have to move quickly to show he is not tied
to Televisa," said Ramirez.
    Public anger over media dominance played heavily in Mexico's
election campaign, with a student protest movement claiming Pena
Nieto's bid for the presidency was propped up by Televisa.
    Ildefonso Guajardo, a senior economics adviser to Pena
Nieto, had no comment on how the next government would view a
new Slim request to enter the TV market.
    "The one thing I can tell you... is that Enrique Pena Nieto
pledged throughout his campaign to boost competition in all
sectors," Guajardo told Reuters.
    Pena Nieto has not given details of his plans for Mexico's
telecoms sector. People familiar with discussions within the PRI
say he is unlikely to do Slim any big favors.  
    Mexicans overpay billions for phone and internet services
that are dominated by Slim, the world's richest man, according
to a report earlier this year from the Organisation for Economic
Co-Operation and Development. 
    Telmex has rejected the findings of the report.
    
    TV LICENSE YEARS AWAY    
    In other countries in Latin America Slim already offers
triple play packages bundling internet, TV and phone services,
but he has been thwarted for years in his bid to enter Mexico's
television market.
    The lower court decision came as a surprise, since Mexico's
communications ministry asked the Supreme Court e arlier this
week to review Slim's claims that regulators mishandled
paperwork on his original application four years ago.
 
     The Supreme Court has yet to decide whether it will take
the case, a court source said. Two telecom analysts said the
lower court decision may have effectively voided the case in
front of the Supreme Court.   
    Most investors still expect Slim to enter Mexico's TV
business eventually and a long wait for the approval has already
been priced into the company's shares.
    In afternoon trade, shares in America Movil,
Telmex's parent, were little changed, down 0.17 percent at 17.28
pesos.
    "(This decision) just removes a window that could have
accelerated Slim's plans to enter the TV market," said Julio
Zetina, analyst at Vector Casa de Bolsa in Mexico City.
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