PREVIEW-Mexico's Telmex seen with lower quarterly net

* Economy, competition seen weighing Telmex

* Company to report third-quarter results on Wednesday

MEXICO CITY, Oct 20 (Reuters) - Telmex is likely to report
lower quarterly sales and net profit as growing competition and
an economic slump led to canceled phone lines and fewer new
broadband Internet clients.

The dominant Mexican fixed-line telecommunications company,
controlled by billionaire Carlos Slim, will probably report
third-quarter net profit of around 4.92 billion pesos ($364
million), down 9.6 percent from a year earlier, according to the
average forecast of eight analysts consulted by Reuters.

With Mexico beginning to emerge from a deep recession,
Telmex, which is also the nation's leading broadband Internet
provider, will probably post a 3 percent dip in sales to 30.171
billion pesos for the quarter, according to the analysts.

Rising competition from small carriers and mobile telephone
operators, in addition to the slumping economy, mean Telmex
probably lost 87,000 fixed-line clients in the quarter, according
to the analysts.

"Telmex's revenues will likely fall 4 percent annually,
mainly because of continued weakness in fixed-line telephones and
cable companies' bundled offers," Vector brokerage analyst Martin
Lara said in a note to clients.

Telmex (TELMEXL.MX) TMX.N is scrambling to quickly build
its Internet business to make up for the slide in its fixed-line
and long-distance telephone revenues.

But its Internet business faces tougher competition as well.
Cable television operators and even dominant Mexican cellphone
operator America Movil (AMXL.MX) (AMX.N), which is also
controlled by Slim, are racing to stake out territory in the
fast-growing market.

Analysts estimate that Telmex added 453,000 broadband clients
during the quarter, 19 percent fewer than in the year-ago
period.

"We will be watching for indicators that might signal a
sustained pickup in the company's metrics, but for now, we
reiterate our 'underperform' recommendation," said BBVA analyst
Andres Coello.

Telmex, a former government monopoly, plans to report its
quarterly results on Wednesday after the stock market closes.
The following table shows the analysts' average estimates and
does not take into account Mexico's inflation.
===============================================================

2009 2008 PERCENTAGE

JULY-SEPT JULY-SEPT CHANGE
---------------------------------------------------------------
Revenue 30.171 bln 31.091 bln -2.96 pct
EBITDA* 13.359 bln 14.357 bln -6.95 pct
Operating profit 8.876 bln 9.949 bln -10.79 pct
Net Profit 4.918 bln 5.438 bln -9.56 pct
Net fixed-line adds -87,000 +12,000
New broadband lines 453,000 558,000
===============================================================
* Earnings before interest, taxes, depreciation and amortization
($1 = 13.5035 pesos at end of Sept)
(Reporting by Noel Randewich; Editing by Lisa Von Ahn)