Temporary Setback for Telmex Pay-TV Ambitions Daniel Hernandez - Los Angeles Times
go to original January 27, 2013

Billionaire Carlos Slim, at a news conference this month, is making progess in his efforts to break into the Mexican television market. (Susana Gonzalez/ Bloomberg)

MEXICO CITY - The decision by Mexico’s Seventh Court (Septimo Tribunal) to deny telco Telmex a licence to offer pay-TV services is only “a temporary farewell” to such ambitions, according to analyst firm Monex Grupo Financiero.

The telco could offer such services via its América Móvil cellular unit with approval by the country’s Comisión Federal de Telecomunicaciones (Federal Telecommunications Commission) of the Interconnection Framework Convention (Convenio Marco de Interconexión)

The Convention is a regulatory instrument by which it seeks to improve competition between fixed network operators to allow interconnection between various participants and the telephone network in Mexico in exchange for various conditions.

According to the firm’s telecommunications and airports analyst Valeria Romo, the court’s decision to deny Carlos Slim-owned Telmex use of ‘constructive approval’ to modify its licence is only “a temporary farewell” to pay-TV.

According to Romo, the process began back in 2008 when América Móvil, through Telmex, sought to modify its licence, the request being rejected in 2010 by the Secretaría de Comunicaciones y Transportes (Ministry of Communications and Transport) on the grounds that the company failed to comply with the Convention’s requirements. América Móvil subsequently initiated a series of remedies, which were taken on board by the SCT, including ‘constructive approval’, which was denied in November 2012 and confirmed January 23 by the Court.

Romo told El Economista that the telco would start a new process to make the necessary changes, with the Convention playing a significant role, because fulfilment of the requirementds by América Móvil would enable the company would offer pay-TV services. Furthermore, approval by the Comisión Federal de Telecomunicaciones of the response by the Comisión Federal de Mejora Regulatoria (Federal Regulatory Improvement Commission) on the Convention was positive news for the telecommunications sector as a whole, but especially for América Móvil.

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