Mexico approves controversial Televisa mobile bid

MEXICO CITY (Reuters) - Mexico's telecommunications regulator approved a controversial bid by broadcast giant Televisa to enter the mobile phone market on Monday, ratcheting

up competition on market leader America Movil.

Cofetel, as the regulator is known, said in a statement it ruled the joint bid by Televisa and partner Nextel was valid despite objections from some politicians who said the bidding process had been rigged to allow Mexico's top broadcaster to present a low-ball bid for wireless spectrum.

Televisa and Nextel raised eyebrows after bidding $14 million for its license, a fraction of the $400 million offered by rivals America Movil and Telefonica SA for another slice of the mobile spectrum.

Critics said the government backed down in the face of Televisa, which controls about 70 percent of Mexico's broadcast television market.

But the government has stood behind the auction arguing it will promote competition in the mobile phone market where Carlos Slim's America Movil is the leader.

The venture of Nextel, a unit of NII Holdings Inc and Televisa was the only group eligible to bid for the 30 MHz nationwide block because of rules capping the amount of spectrum any one operator can own.

Cofetel attempted to approve the Televisa bid last Friday but was unable to do so after two of the five commissioners failed to show up for the meeting.

The board's decision must be approved by Mexico's Communications Ministry.

One of the Cofetel commissioners excused himself from attending the Friday meeting, saying in a letter he has opposed the way Mexico's mobile frequency auction had been structured.

Televisa has committed to buying 30 percent of wireless operator Nextel for $1.44 billion if their bid succeeds. It plans to develop a 3G data services network, allowing it to compete directly against America Movil and Telefonica.

(Additional reporting by Armando Tovar and Robert Campbell; editing by Missy Ryan, Derek Caney, Andre Grenon and Carol Bishopric)