Weekly Report - 7 April 2011 (WR-11-14)

MEXICO | Business. On 5 April Mexico's dominant broadcaster, Televisa, announced that it was negotiating a partnership with Iusacell, the telecoms company controlled by the main shareholder in the only other major Mexican broadcaster, TV Azteca. The announcement is another move in the long running struggle by the broadcasters to break the grip of Carlos Slim Helú, the world's richest man, on Mexico's telecoms industry. Slim, who controls Telmex and Telcel, the biggest mobile operator, also wants to get into broadcasting. Under the terms of current Mexican licences, telecoms companies cannot operate as broadcasters.On 6 April a US business newspaper, the Wall Street Journal (WSJ), claimed that Televisa would end up buying 50% of Iusacell for US$1.6bn. The WSJ cited executives from both sides as the sources for its claim. In 2010, Televisa tried to get into the telecoms market by buying 30% of Nextel de México, but this deal was thwarted by legal objections from Iusacell, among others, to the award of a concession which would have allowed Televisa the so-called 'quadruple play', allowing it to transmit its content to mobile telephones. The controlling shareholder in both Iusacell and TV Azteca is Ricardo Salinas Pliego. In a statement to the stock market, Televisa emphasised that the discussions were still at a preliminary stage. The deal between Iusacell and Televisa is being negotiated directly by the two companies' principal shareholders, Emilio Azcárraga for Televisa and Salinas for Iusacell. Telcel is arguing before the regulator, Comisión Federal de Telecomunicaciones (Cofetel), that Iusacell's broadband operator, SOS Telecomunicaciones, should lose its licence because it has still not paid the government for it.

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