Cofetel welcomes Televisa-Iusacell deal-report

Tue May 29, 2012 10:43am EDT

May 29 (Reuters) - Mexico's chief telecom regulator welcomed broadcaster Televisa's $1.6 billion bid for half of cell phone company Iusacell, but said the companies must address concerns about advertising and content before the competition watchdog clears the deal.

"I think it would allow two operators to become a stronger telecommunications operator and offer better, more affordable services to customers," Cofetel head Mony de Swaan said in an interview with newspaper Reforma published on Tuesday.

In February, Mexico antitrust watchdog Cofeco blocked the bid, a move by two television moguls to challenge Carlos Slim's dominance of the country's mobile phone market.

Televisa and Iusacell filed an appeal against the decision by Cofeco, whose board is expected to schedule its final vote on the deal for next week.

Cofetel has no say in the final decision because it is a separate agency from Cofeco.

Cofeco rejected the transaction in a 3-2 vote, but said it could reconsider its decision if the companies pledged not to jointly exploit the television advertising market.

The agency said the deal between the two companies would create a strong incentive for them to fix advertising prices.

Controlled by Emilio Azcarraga, Televisa is the leading producer of Spanish-language content worldwide. Iusacell is in the hands of Ricardo Salinas, who owns No. 2 Mexican broadcaster TV Azteca.

Both Televisa and Iusacell requested a review of the ruling, a standard procedure for such decisions.

Slim, the world richest man, controls around 80 percent of the fixed-line phones in Mexico, while his mobile company, America Movil, has a market share of under 70 percent.

Televisa and Iusacell were not immediately available for comment.

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