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 Business News | January 2008 
Mexico Cable TV Industry Warns Government on Telmex
 Chris Aspin - Reuters
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Mexico City - Mexico's cable TV industry urged the government on Sunday not to give television rights to the country's largest fixed-line telephone firm Telmex without first negotiating lower phone call rates for rival companies.
Alejandro Puente, the head of the Cable Television Industry Chamber, said Telmex was in talks with the government to gain rights to provide television services alongside its phone and Internet businesses.
Telmex cannot simply apply for rights to offer TV services because its telephone concession bans it from entering that market.
But the firm, a former state monopoly bought from the government by Mexican billionaire Carlos Slim in 1990, has long argued that its reading of the phone concession does allow it to move into cable television.
Puente called on the government to take advantage of the desire of Telmex to enter the television business to negotiate lower phone rates, especially interconnection fees that rival carriers must pay Telmex.
Telmex, which was unavailable for comment, owns the vast majority of Mexico's telephone network. Rivals have to use its lines to place calls, which allows Telmex to control phone rates.
Lower rates, Puente said, would benefit competition in the phone sector, where Telmex has 90 percent of Mexico's 20 million fixed lines, and cut prices for consumers. He said interconnection fees could be much less or even zero.
FATAL OR VERY GOOD
"These negotiations could be fatal or very good for the country," Puentes said at a news conference, adding that if Telmex were allowed to enter the cable TV business it could become a dominant player quickly.
On the issue of dominance, Puente slammed antitrust regulators for not starting a probe into the fixed-line telephone industry in Mexico, where he said it was obvious one player ruled the roost -- Telmex.
Puente said if the Federal Competition Commission (CFC or Cofeco) had launched a probe and declared Telmex dominant, it would have given the government more arguments during TV negotiations to force Telmex to slash rates.
Mexico's Communications and Transport Ministry can set rates for calls between companies deemed dominant and their smaller rivals.
That would help Mexico's cable companies, which are starting to use their networks to carry telephone calls.
Cablevision, one of the country's biggest cable operators and owned by the top broadcaster Televisa, has started to offer phone services in parts of Mexico City.
In November the CFC started an investigation of market dominance of Mexico's mobile phone industry, but not the fixed line market. That probe is still ongoing.
Slim's America Movil, Latin America's largest cell phone company, controls about three quarters of Mexico's wireless market.
President Felipe Calderon has promised to get tough on industries in which weak competition has led to unfair prices and little choice for consumers and businesses. But there have been few signs that he is making serious moves against big corporations.
(Editing by Xavier Briand) |
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