UPDATE 1-Mexico anti-trust body rules Telmex is dominant

(Adds details on ruling, quote, background)

MEXICO CITY, July 6 (Reuters) - Mexico's anti-trust agency ruled on Monday that fixed-line telephone giant Telmex, controlled by billionaire Carlos Slim, is a dominant player in local transit and leasing of dedicated lines.

Telmex (TELMEXL.MX) (TMX.N) , a former government monopoly, controls about 80 percent of Mexico's fixed-line telephone market and is the country's main Internet service provider.

Formally declaring Telmex dominant opens it to the possibility of increased regulation, anti-trust agency Cofeco said in a statement.

Cofeco's board confirmed resolutions that Telmex is dominant in local transit and wholesale leasing of dedicating connections. Both are related to the routing of calls.

"They're markets where the possibility of introducing new competition is limited but that are indispensable to any company that wishes to provide telephone services," Cofeco said.

A Telmex spokesman said the company had no comment on the ruling.

Telmex owns nearly all the country's telephone cables and even the copper wire leading into homes, giving it a powerful hand against smaller companies that are eager to offer phone or Internet services, but need access to infrastructure.

But competition against Telmex has increased in recent years as cable TV companies begin providing phone and Internet services. In addition, some clients are abandoning their fixed-line Telmex telephones in favor of cell phones.

Decisions on another four of Telmex's businesses are pending.

Mexico suffers from having too few players in sectors such as television, cement, beer and soft drinks, but weak competition in the telecoms industry is especially blamed for slowing the country's economic development. (Reporting by Tomas Sarmiento; editing by Gunna Dickson)