By Chris Aspin and Tomas Sarmiento
MEXICO CITY (Reuters) - Mexican fixed-line phone giant Telmex will be allowed to offer TV services later this year, once it fulfills conditions to improve competition, Communications and Transport Minister Luis Tellez said on Wednesday.
Telmex's planned move into broadcasting has been shrouded in controversy because its operating concession can be read to mean it is banned from going into the TV business.
Mexico's competition watchdog believes that Telmex, controlled by billionaire tycoon Carlos Slim, is prevented from offering TV services because of limits on its concession. The cable television industry fears Telmex's entry into the broadcasting world.
"In the end, Telmex is going to be able to offer this service ... we are working on it and seeing what the conditions are that they have to fulfill," Tellez told the Reuters Latin America Investment Summit.
"They are conditions that bring more opening, more competition and better prices for users."
Telmex (TELMEXL.MX: Quote, Profile, Research, Stock Buzz) (TMX.N: Quote, Profile, Research, Stock Buzz) is Mexico's largest provider of high speed Internet service, which analysts say puts it in a good position to broadcast television over its Internet network.
The concession controversy and a probe into monopolistic practices in the fixed line industry have held back Telmex's long-desired bid to serve up television to its customers.
But Tellez said his ministry, Telmex and telecom regulator Cofetel were working out the details.
"If we had it ready we would have come out and explained it to the public but it is still not ready," he said.
"What is sought is more competition, more opening in the Mexican market so that Telmex can offer these services and without doubt it has the right to offer them eventually, when it fulfills conditions being asked," he said.
Telmex's entry into television would pit it against Televisa (TV.N: Quote, Profile, Research, Stock Buzz) (TLVACPO.MX: Quote, Profile, Research, Stock Buzz), which overwhelmingly dominates Mexico's television industry, and several regional cable operators.
Televisa, the world's largest provider of Spanish language content and a Telmex business partner, also has its eyes on phone services.
Mexico's government opened a probe late last year into monopoly practices in the broadband Internet market and fixed line telephone market.
Telmex has about 60 percent of the country's high-speed Internet market, and about 90 percent of fixed lines.
Shares of Telmex were down 0.58 percent at 20.58 pesos. Continued...
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