Mexican broadcaster Televisa’s plan to acquire half of cellphone company Iusacell has been rejected by Mexican anti-monopoly regulator Federal Competition Commission (Cofeco). Televisa was offering $1.6 billion for 50% of Iusacell.
The decision was adopted by a three to two vote of the five commissioners.
Cofeco’s resolution showed that the two commissioners that voted against the decision considered that Televisa’s participation in the equity capital of Iusacell could achieve efficiencies in the market, which would have a favorable impact on the level of competition in the cellular market. Those commissioners also indicated that any possible negative implications from such participation of Televisa as an equity investor in Iusacell could be prevented through specific conditions imposed by Cofeco.
“In the opinion of this company, it is a decision that does not encourage competition in Mexico’s telephone market,” Iusacell said in a statement.
In a press release, Televisa noted the costs of fixed and mobile telephony and data services in Mexico are among the highest in the developed world, and that international organizations attribute this to the lack of competition in Mexico’s telecommunications industry and the dominance by a single participant (Telcel) with an 80% share of fixed-line telephony and 70% of mobile telephony.
“Accordingly, this decision taken by Cofeco damages the potential for competition in a key sector for Mexico’s development, one in which Cofeco has already declared a company to be a dominant participant,” Televisa added.
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