Mexico's Televisa says it supports planned telecom reform

Tue Feb 26, 2013 12:37pm EST

* Televisa says it can benefit from broadcasting competition

* Company also hopes to see increased telecom competition

* Investment in Iusacell to some extent depends on reform

MEXICO CITY, Feb 26 (Reuters) - Mexican broadcaster Televisa , the world's biggest producer of Spanish-language content, said on Tuesday it supports planned reforms in Mexico that will increase competition in television and phone markets.

Mexico's mobile and fixed-line phone market is dominated by tycoon Carlos Slim's America Movil, while Televisa has said it controls about 70 percent of the country's broadcasting market, with rival TV Azteca controlling the rest.

Mexican President Enrique Pena Nieto took office late last year pledging to shake up competition in Mexico, and the country's three main political parties in December signed a pact committing to reforms such as strengthening the telecom watchdog, launching new television channels, and increasing competition in phone markets.

The so-called Pact for Mexico calls for introducing reform to the country's telecom law this year, but details are not yet available.

"We are used to competition and we believe that competing with our content and all our assets and energy on the broadcasting side will be good for us," Alfonso de Angoitia, Televisa executive vice president, told analysts on a conference call.

Televisa has competed with TV Azteca since its smaller rival was privatized by the government about 20 years ago, forcing Televisa to trim costs and improve broadcasting quality. That has made Televisa more profitable, de Angoitia said.

"Additional broadcast networks will result in healthy competition for us," he said. "We basically support a reform that will bring competition to broadcasting but also effectively levels the playing field on telecommunications."

IUSACELL

Still, de Angoitia was a little more hesitant about the prospects for increased competition in Mexico's phone markets, saying some of Televisa's planned investment in mobile phone company Iusacell will depend on the success of reform in the sector.

As part of a $1 billion investment plan for 2013, Televisa has set aside $565 million for its cable and telephone businesses, which include its 50 percent stake in Iusacell.

"Some capital may be contributed (to Iusacell) in the first (six months) of 2013, but that will be a smaller amount of money," de Angoitia said. "We are going to see what happens in terms of the implementation of the Pact for Mexico and the regulatory changes to see if ... the playing field will be leveled or not, to see if it makes sense to invest more."

Competition authorities in Mexico last year signed off on Televisa's joint venture with Iusacell's co-owner, Grupo Salinas, which also controls TV Azteca.

Televisa said in October that Iusacell will need $800 million in investments in the coming three years.

Iusacell's share of the Mexican mobile phone market rose to more than 6 percent in the third quarter of 2012 from 4.4 percent in the third quarter of 2011, de Angoitia said on a third-quarter results conference call.

That compares to the about 70 percent of the market controlled by Slim's America Movil and around 20 percent controlled by Spain's Telefonica.

Televisa said late on Monday that its fourth-quarter profit rose to 3.105 billion pesos ($241 million) from 2.586 billion pesos in the year-earlier quarter.

Separately, de Angoitia told investors that in spite of the strong results, the company is not planning a special dividend, preferring instead to keep money on hand for possible acquisitions.

Televisa shares were down 1.36 percent at 66.85 pesos in late-morning trading. The shares have recently been close to a year high of around 73 pesos, reached at the start of this month. Mexico's benchmark IPC index was down 0.38 percent.

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