Following the Mexican antitrust regulator’s (Cofeco) decision to conditionally approve broadcaster Televisa’s acquisition of a 50% stake in wireless operator Iusacell, the parties have criticised the conditions attached to the ruling.
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Following the Mexican antitrust regulator’s (Cofeco) decision to conditionally approve broadcaster Televisa’s acquisition of a 50% stake in wireless operator Iusacell, the parties have criticised the conditions attached to the ruling.
A spokesperson for Grupo Salinas, the parent company of Iusacell, described the conditions as “practically a message to stop the investment”. He said the conditions, which ran to 600 pages, were so tough and rigid that he wondered whether the regulator wanted investment in the operator or not.
In spite of its length, the spokesman said certain sections of the ruling regarding an auction for upcoming spectrum and advertising rivals’ services on Grupo Salinas channels lacked clarity and did not state potential solutions.
He said it was Grupo Salinas’s view that the ruling ignored the dominance of Carlos Slim’s Telcel, that has a 70% market share.
Televisa was more cautious in its reaction. A company spokesperson said the company is studying the document and will announce next week whether it plans to accept the conditions or to legally challenge the decision.
“We are happy that we got the permit to participate in Iusacell, but we are analyzing the conditions in order to see the viability,” the Televisa spokesperson said.
The company has been trying to push through the US$1.6bn acquisition for 14 months now.
In a filing with the SEC, Televisa presented some of the requirements imposed upon it by Cofeco.
Key among the conditions for both broadcasters to follow are certain rules around a spectrum auction for an upcoming TV licence that they will not be allowed to compete for. Mexico currently has two national TV networks that dominate the market: Televisa and TV Azteca, owned by Grupo Salinas.
A “third” network could give Carlos Slim the opportunity to compete with Televisa and TV Azteca.
Televisa would also be required to sell advertising on its network to all telcos and offer cablecos and DTH platforms the option to buy smaller packages of its channels than it currently does.
Iusacell is required to have an independent board with guarantees in place to stop collusion in the broadcasting industry between Televisa and Grupo Salinas.
Iusacell would also have to divest all shares held in Total Play, launched in 2010 by Grupo Salinas, which offers services that rival Televisa.
