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Televisa, Iusacell say Mexican regulator rejected deal moving media firm into mobile phones
MEXICO CITY (AP) ' A move by the world's largest Spanish-language media company into Mexico's mobile-phone market has been rejected by the country's anti-monopoly regulator, the two companies involved in the deal said.
Televisa and mobile-phone operator Iusacell said Wednesday that Mexico's Federal Competition Commission, or COFECO, voted against its purchase of a $1.6 billion, 50 percent share of Iusacell. Televisa said the vote was 3-2 in opposition.
Televisa, Iusacell and outside experts have said the move could generate more competition in Mexico's mobile-phone market. Seventy percent of the cellular phone business in Mexico is controlled by billionaire Carlos Slim's Telcel.
A Federal Competition Commission spokesman said the agency had not finished notifying the parties involved in the proposed deal and would have no immediate comment. Televisa said it would appeal.
"This decision taken by COFECO damages the potential for competition in a key sector for Mexico's development," Televisa said. "The costs of fixed and mobile telephony and data services in Mexico are among the highest in the developed world."
Iusacell called the move "questionable" and "a decision that does not encourage competition in the Mexican telephone market" and said it would be reviewing the regulator's ruling in detail before making further arguments.
The Paris-based Organization for Economic Cooperation and Development said Monday that Mexicans overpaid for telecommunications services by more than $13 billion a year from 2005 to 2009. It said a lack of competition cost Mexico $25 billion a year in the same period.
The OECD said Iusacell has 4.4 percent of the mobile-phone market and Televisa's entry could generate more competition in the sector. Iusacell is a property of the Salinas Group, which operates TV Azteca, the second biggest television operation in Mexico after Televisa.
Slim, who is one of the world's richest people, denied on Tuesday that he has a monopoly on telecommunications in Mexico, telling reporters that his phone companies have either kept prices the same or reduced them.
He denied any of his businesses are monopolies.
"What does monopoly mean? One," he said, adding that "if we have less than 100 percent of the market it means that there are other competitors."
Asked about Televisa's potential entry into Mexico's mobile-phone market, he said that he didn't fear competition.
"We aren't afraid of competing with anyone," he said. "What we want is that they invest, that they don't take advantage of our investments."
Slim's companies have pulled their advertising from Televisa and TV Azteca, saying they overcharge, and he has accused the two TV operations of monopolistic practices. He has been trying to get the government's permission to enter Mexico's pay-television market, a request that has been opposed by Televisa.