October 3, 2010 / 12:59 AM / in 7 years

UPDATE 1-Mexico's Televisa, Nextel get wireless license-govt

* License issuance caps series of legal challenges

* Nextel, Televisa duo will boost competition (Adds quotes, background)

By Tomas Sarmiento

MEXICO CITY, Oct 2 (Reuters) - Mexico’s government has issued a license to Nextel Mexico and partner broadcaster Televisa that will allow them to deploy a wireless phone network in the country, officials said on Saturday.

The issuing of the license caps a series of legal disputes filed by potential competitors and opens the way for more competition in the country’s mobile telephone market dominated by billionaire Carlos Slim’s America Movil.

Officials issued the license on Friday, Communications Minister Juan Molinar told a media conference, where he was joined by Nextel executives.

“This has been a very important process to incorporate a large quantity of radio-electric frequencies for third- generation mobile telephone service,” Molinar said.

Nextel Mexico and Televisa (TV.N) (TLVACPO.MX), the world’s largest Spanish-language content producer, won a chunk of spectrum in a government auction in July but their claim was challenged in the courts by competitors.

    Companies belonging to telephone, media and retail tycoon Ricardo Salinas filed dozens of lawsuits to try to overturn the concession. The legal challenges were eventually dismissed by the courts.

    Nextel Mexico and Televisa offered about $14 million for the nationwide license, the only bid for that block of the wireless spectrum. It was the lowest bid allowed by the auction’s rules, causing a stir in the industry. Rivals America Movil (AMXL.MX) (AMX.N) and Telefonica (TEF.MC) paid $400 million for another portion of the spectrum.

    Televisa committed to buy 30 percent of Nextel Mexico, a unit of NII Holdings (NIHD.O), for $1.44 billion once the license was granted.

    “We hope to soon publicly announce the conclusion of the transaction with Grupo Televisa,” said Gustavo Cantu, Nextel Mexico’s vice president.

    The duo plans to develop a 3G data services network across the country and compete with America Movil and Telefonica. (Reporting by Tomas Sarmiento; Editing by Peter Cooney)

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