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UPDATE 2-Mexico lower house backs telecoms reform, Senate awaits
March 22, 2013 / 3:20 PM / in 5 years

UPDATE 2-Mexico lower house backs telecoms reform, Senate awaits

* Bill tightens limits on foreign investment in TV, radio
    * America Movil stock buoyed by prospect of Slim's TV entry

    By Dave Graham and Miguel Gutierrez
    MEXICO CITY, March 22 (Reuters) - Mexico's lower house of
Congress approved a sweeping reform of the telecommunications
industry early on Friday, sending legislation that aims to
reduce Carlos Slim's dominance of the phone market to the
    The reform bill, which also seeks to curb the power of
Mexico's main broadcaster, Televisa, intends to open up the long
closed industry to more foreign competition and give regulators
the power to compel dominant companies to sell assets.
    Since Mexican President Enrique Pena Nieto unveiled the plan
at the start of last week, shares of Slim's phone giant America
Movil and Televisa have taken a hit.
    Pena Nieto's reform would give regulators the power to force
companies with more than 50 percent of a market to dispose of
assets. America Movil has about 70 percent of the Mexican mobile
business and 80 percent of the fixed line market. Televisa has
roughly 60 percent of the broadcasting market.
    Pena Nieto hailed the lower house decision, calling it
"excellent news" for Mexico on his Twitter account.
    "It's a decisive step for increased coverage, better prices
and improved quality in service and content," he said. 
    Mexico's Senate will now discuss the bill, and lawmakers in
Pena Nieto's ruling Institutional Revolutionary Party, or PRI,
say they believe it should pass before the current session of
Congress concludes at the end of April.
    Lawmakers in the lower house made some amendments to the
bill, agreeing to tighten the planned opening of Mexico's TV and
broadcasting sector to foreign investment to what other
countries permit in their respective markets.
    The initial bill allowed foreign investors to take up to 49
percent ownership of TV or radio operators.
    The lower house, which voted overwhelmingly in support of
the bill, also agreed to change a section granting the president
the right to give an opinion on the awarding of concessions.
Instead, the minister of communications will do this.
    On Thursday, America Movil's shares recovered some ground
after investors were encouraged by the possibility Slim, the
world's richest man, could profit by entering Mexico's TV
market, which he has been kept out of, so far.
    After the markets closed on Thursday, America Movil said it
had obtained the exclusive broadcast rights in Latin America,
except Brazil, for the 2014 winter Olympic games as well as the
2016 summer Olympics.
    PRI lawmakers say privately that Slim will be allowed into
television and that he has been getting ready to challenge
Televisa and Mexico's other main broadcaster, TV Azteca
, in the sports broadcasting market.
    Slim acquired large stakes in top flight soccer teams Leon
and Pachuca last August, and this week, media reports said he
was considering buying broadcasting rights for Guadalajara, one
of Mexico's biggest clubs, which has won a record 11 league
    Asked if the reports of his interest were true, a spokesman
for Slim said: "there's nothing for the moment."
    Shares of America Movil rose by more than 2 percent in early
trading on Friday, while Televisa was barely changed.
    Since the reform was presented on March 11, shares in
America Movil have fallen by just over 7 percent. Over the same
period Televisa's stock has lost some 6.3 percent of its value
and shares of TV Azteca are down about 7.8 percent.

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