Mexican court passes Slim TV bid to next government

MEXICO CITY Sat Jul 7, 2012 12:59am IST

Mexican telecommunications and retail tycoon Carlos Slim Helu delivers his speech on the impact of new technologies during a lecture organized by the United Nations Institute for Training and Research (UNITAR) at the United Nations European headquarters in Geneva June 11, 2012. REUTERS/Valentin Flauraud

Mexican telecommunications and retail tycoon Carlos Slim Helu delivers his speech on the impact of new technologies during a lecture organized by the United Nations Institute for Training and Research (UNITAR) at the United Nations European headquarters in Geneva June 11, 2012.

Credit: Reuters/Valentin Flauraud

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MEXICO CITY (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 earlier 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.

(Additional reporting by Dave Graham; Editing by Mica Rosenberg, Sofina Mirza-Reid and Tim Dobbyn)

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