Rules for TV frequency auction in Mexico likely to see delay

Gabriel Miramar-Garcia | 27-11-2012

Even as Mexico's telecom regulator Cofetel looks to open up competition for television in that country, it is unlikely to meet its deadline for setting out parameters for a frequency auction that would do just that.

The market is dominated by TV Azteca and Televisa, which together control 95% to 100% of the market, according to Cofetel. And a lucrative business it is, too: Televisa reported profits close to $530 million in 2011, while Azteca reported net income close to $170 million. Even more of a red flag is that Televisa, the world's biggest producer of Spanish-language content, also owns half of TV Azteca's sister company, small cellphone firm Iusacell, which it bought for $1.6 billion earlier this year.

This has led to ongoing investigations into price-fixing and other monopolistic practices, while Cofetel looks to clear the way for an airwaves auction to add at least two national networks to the slate of choice.

However, Reuters is reporting that chief regulator Mony de Swaan told reporters that the possibility for making a 30 November deadline is, at best, "remote." Unfortunately the import of this is not minimal: the delay pushes the process back to after President-elect Enrique Pena Nieto takes office on 1 December a fact that may hold up the entire process indefinitely.

Cofetel plans to put 306 digital frequencies up for licencing nationwide, with the goal of attracting someone willing to put in the infrastructure to build national networks. The obvious choice would be carlos Slim, head of Latin America pay-TV powerhouse America Movil and the world's richest man, but Slim had been repeatedly denied in his attempts to enter the TV market in his home market. His dominance of landline residential lines (through his acquisition of Telmex) as well as his control over the wireless game have prompted Cofetel to be less than open to his TV aspirations.