WASHINGTON (Reuters) - Carlos Slim’s plans to broadcast Mexican soccer via his Internet television service is a costly gamble that should be halted by regulators, Mexican billionaire Ricardo Salinas said on Monday.
Slim, the world’s richest man, bought a controlling stake in two leading Mexican soccer teams last month and the billionaire intends to broadcast the teams’ games through third-party cable contracts and his online web ‘channel’ Uno TV.
Salinas, head of Mexican broadcaster TV Azteca, said Slim overpaid for a foothold in the market and local sports fans could revolt if they cannot easily watch the sports teams they love because they are on pay cable or on the Internet.
“Some have predicted social unrest. I don’t know. But it’s not going to be nice,” said Salinas, noting that local football games are typically available on free television.
While Slim has ruled the Mexico phone sector since privatizing state-run Telmex in 1990, rival billionaires like Salinas and Televisa’s Emilio Azcarraga dominate television.
Mexico’s telecom titans have lately tread on each other’s patches with Televisa joining Salinas in a phone venture and Slim testing the limits of rules that bar him from Mexico TV.
“If you don’t know what you’re doing, (television) is an easy way to lose a lot of money,” he said. “What they paid for these soccer teams. It was ridiculous,” Salinas said.
Slim’s spokesman was not immediately available for comment.
Salinas and rival broadcaster Televisa have linked arms with cell phone operator Iuscell which they hope will challenge Slim’s dominance and roughly 70 percent market share for Telcel, a subsidiary of America Movil.
Salinas said the key to that joint project, backed by a $1.6 billion Televisa investment, means building an excellent network in cities and contracting with third parties to provide service in other parts of the country.
“The majority of opportunities are there - in the middle market,” said Salinas, speaking to Reuters after an event at the U.S. Chamber of Commerce. “Most people live in urban areas and we are improving our capacity.”
Salinas said Iusacell should hit a sweet spot if it can grow market share from roughly 5 percent to 20 percent in coming years as mobile devices gobble up available cell phone networks.
If Slim continues with plans to broadcast local soccer online or behind the wall of pay TV, Salinas said the plan must be halted because Mexico has specifically banned Slim from the country’s television sector.
“Their argument is: ‘It’s the Internet. You can’t stop the Internet.’ Of course, that’s a half-truth. Meaning, it’s a lie,” said Salinas.
Salinas said he has been waiting a year for Mexico’s telecom regulator, Cofetel, to set terms for Uno TV and that the delay is aiding Slim. The controversy came to life last year when Slim used Uno TV to transmit the PanAmerican Games.
“We believe that the regulator should have acted a long time ago,” he said.
The Cofetel chief, Mony de Swaan, is under lawmaker scrutiny for awarding contracts to friends and not reporting details of that work.
Those questions are hanging over the regulator and need to be resolved, said Salinas.
“He is a high-ranking public official and so obligated to disclose his financial dealings,” the broadcaster said of de Swaan. “If these are dealings with friends, even worse.”
Mony de Swaan did not respond to a request for comment.
Salinas has also faced public scrutiny this year as the value of his retailer Elektra plummeted after officials questioned how his shares were being traded and had the company removed from the Mexico stock index.
Salinas said the company, which is about 70 percent family-owned, was wrongly kicked out of the index and the move only hurt outside investors.
The company won an injunction and is included in the exchange’s benchmark IPC.
“Some people think I wake up in the morning and check how much my stock is worth. I am not selling my stock at any price. But I feel bad for those who invested with us,” said Salinas who is suing the Mexican stock exchange over its decision to kick Elektra out of the index.
Reporting By Patrick Rucker; editing by Carol Bishopric