Mexican antitrust regulator Cofeco (Comision Federal de Competencia) is slowing down media company Grupo Televisa SAB’s plan to buy half of mobile phone group Iusacell, owned by Ricardo Salinas Pliego, owner of TV Azteca. The country’s biggest broadcaster agreed last April to invest US$1.6 billion for a 50% stake in Iusacell, but now the deal is under scrutiny by competition regulators.
It has been nine months since the acquisition was announced. The delay is because Cofetel requested more information from Televisa and Mexico’s number three operator Iusacell to get a better grasp of what their tie-up would mean for the country’s telecommunications sector.
Follow RCR Wireless News – Americas on Twitter, Facebook and subscribe to our free periodic newsletters
Cofetel’s decision on whether to approve the partnership is expected within the coming weeks. Until then, and for the past days, there have been a lot of repercussions. The Mexican Association for the Right to Information (Amedi) has convened a meeting to discuss the acquisition.
Amedi noted that, if the Federal Competition Commission (CFC) approves this alliance, it would be a threat to competition policy of the Mexican state and would violate article 28 of the Constitution that prohibits monopolies and the Antitrust Act, recently amended to strengthen the regulatory body. “The merger of the two companies represent the largest concentration of communication resources in the history of our country,” said the invitation.
However, Francisco Borrego, chief legal counsel for Ricardo Salinas, Iusacell’s owner, said the operator could disappear if the investment doesn’t take place.
Televisa has around a 70% share of the commercial free-to-air television broadcasting market, and Azteca around 30%.
If approved, some specialists point out that it would be another milestone in ongoing disputes. Televisa-Iusacell could create a stronger competitor in the phone market, which today is dominate by Carlos Slim’s fixed-line and mobile phone companies Telmex and Telcel.
Be sure to read
