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Mexico billionaires battle over TV, phone markets

MEXICO CITY, March 4, 2011 – Tensions are rising between the world\’s richest man Carlos Slim and two other Mexican billionaires over control of TV and telephone markets in the most populous Spanish-speaking country.

More than 20 Mexican telephone and cable operators on Wednesday asked the government to regulate the fees charged by Slim\’s dominant Telcel mobile operator to connect to its networks, setting off accusations on all sides.

Telecoms tycoon Slim is facing off against Emilio Azcarraga, head of Televisa, the world\’s largest Spanish-speaking television empire, and Ricardo Salinas, owner of only the second television network in Mexico, TV Azteca.

Televisa and TV Azteca have both launched competitive bundled "triple-play" — TV, Internet, and telephone — services and are starting to encroach on territory traditionally held by Slim.

But authorities have so far prevented Slim, whose Telmex is Mexico\’s number one fixed line company and whose Telcel dominates the mobile market, from offering television services.

A string of related disputes are now simmering.

In recent weeks, several of Slim\’s companies stopped advertising on Televisa in a disagreement over rates.

TV Azteca, Mexico\’s second broadcaster, then refused advertising space to Slim\’s companies unless Telcel offered lower interconnection rates to the phone companies of Salinas, a move Slim\’s spokesman likened to "blackmail."

Mexico\’s Federal Competition Commission (CFC) said that the dispute was an opportunity to try to resolve notoriously high rates in the telecoms industry and to seek more competition in television services.

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The telephone operators, citing CFC figures, said Wednesday that if the government intervened to lower interconnection charges customers could save around 73.5 billion pesos (about six billion dollars).

Telcel said that its fees had been falling, but that the drop was "not reflected in the rates that the companies\’ users pay."

It said in a statement that the other companies needed to invest much more in telephone networks.

"We can talk about interconnection rates but we should also talk about opening TV for others," Arturo Elias Ayub, Slim\’s spokesman, told AFP.

"Technically, we\’re ready to develop TV. We\’re ready today. We\’re only waiting for permission."

Many observers see the dispute as part of a wider battle among a handful of players who have dominated the television and telephone industries for years.

A recent US diplomatic cable revealed by WikiLeaks said the three tycoons were among Mexico\’s 10 richest men and among the few to benefit from the breaking up of the country\’s centralized economy in the 1990s.

"Unfortunately, in some cases, these privatizations ended up creating private-sector monopolies — benefiting the savvy businessmen and politicians while leaving the average Mexican out in the cold," it said.

Consumers in the country of 112 million still have few choices, analysts say.

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"What\’s really needed are strong competitors who are prepared to make significant investments so that users can really benefit," Enrique Melrose, a telecoms analyst and professor at Mexico\’s ITAM university, told AFP.

Communications regulators on Thursday said they had sought to promote competition but had been repeatedly blocked in the courts.

The disputes have not distracted Slim from a string of high-profile business activities in recent weeks as well as the opening of a massive new art museum in Mexico City.

Despite the growing animosity, Televisa\’s Azcarraga also showed up at the glitzy opening of the Soumaya museum on Tuesday night.

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