Mexico's Megacable may launch cellphone service

* Eyes using the network of an established player

* Wants to bundle mobile with other services

By Noel Randewich

MEXICO CITY, Oct 27 (Reuters) - Megacable, Mexico's largest cable operator, may launch a cellphone service using the network of an established player, senior executives said on Tuesday.

Megacable (MEGACPO.MX) and other Mexican cable companies are rushing to stake out territory in telephone and Internet services that are sold as packages with their traditional video businesses.

But Mexican operators have yet to bundle cellphone services with fixed-line, television and Internet, a so-called "quadruple-play" offer.

"In quadruple play, we are still looking at an MVNO (mobile virtual network operator) model with one of the actual players," Megacable General Manager Raymundo Fernandez told analysts during a conference call. "You might find something about that in the near future -- the very, very close future."

Virtual networks, created by striking a deal to use the spectrum and infrastructure of an established cellphone operator, are seen as a relatively low-cost way to enter a mobile telephone market.

Mexico's leading mobile telephone operator is America Movil (AMXL.MX), controlled by tycoon Carlos Slim. Spain's Telefonica (TEF.MC) is a distant second.

Fernandez said Megacable could bid for mobile telephone spectrum expected to be offered by the government.

"We are also looking at the frequency auctions," he said. "We are in the industry, so the quadruple play is something that we see in the near future."

Guadalajara-based Megacable may become an acquisition target as telecommunications and cable companies make further moves into each others' traditional markets, analysts say.

Mexican lawmakers this year are expected to debate changing rules to allow foreign investors to take controlling positions in the country's fixed-line telecommunications companies. (Reporting by Noel Randewich; editing by John Wallace)