UPDATE 2-Mexico readies fiber optic tender rules, contracts

* Mexico to publish fiber optic tender rules in Nov

* Contracts may be awarded in Jan 2010

* Govt wants to boost telecom competition (Adds details on government's plans, background)

By Tomas Sarmiento

MEXICO CITY, Oct 26 (Reuters) - Mexico said on Monday it plans to publish the rules next month for a fiber optic tender, which local and international telecom companies are eagerly awaiting in order to expand their reach.

Deputy Communications and Transport Minister Gabriela Hernandez told a news conference the government hoped to award the contracts in January.

The Federal Electricity Commission, or CFE, Mexico's state-owned power utility, owns a 27,000 kilometre (16,777 mile) fiber optic network and has said it is willing to tender two unused strands of it.

The CFE's backbone will provide private companies with a new route to transport television, phone and Internet signals to a wider audience.

Hernandez said the CFE's backbone will be divided into three pieces: Pacific, running from the border state of Baja California down to Oaxaca; Center, from Chihuahua down to Chiapas; and Gulf, from Nuevo Leon to the Yucatan peninsula.

The government is also preparing rules to tender new mobile telephone frequencies.

Weak competition in the telecoms industry is blamed for slowing down the country's economic development.

Fixed-line operator Telmex (TELMEXL.MX) TMX.N, controlled by billionaire Carlos Slim, owns nearly all Mexico's telephone cables and even the copper wire leading into homes, giving it a powerful hand against smaller companies eager to offer phone or Internet services, but which need access to infrastructure.

Slim's cell phone giant America Movil (AMXL.MX) (AMX.N) is also the leading wireless operator in Mexico.

Broadcaster Televisa (TV.N) (TLVACPO.MX) has voiced interest in participating in the fiber optic and mobile phone tenders and has held talks with international players aiming at developing a wireless network in Mexico.

Spain's Telefonica (TEF.MC) is also expected to jump on the tender wagon to boost its offer, particularly in the profitable market in Mexico City and surrounding areas. (Writing by Cyntia Barrera Diaz; Editing by Tim Dobbyn)