UPDATE: Mexico's Televisa, Telcos Partner For Fiber Auction
March 19 2010 - 6:06PM
Dow Jones News
Mexican media company Grupo Televisa SAB (TV) said Friday it
will partner with cable operator Megacable Holdings SAB (MEGA.MX)
and the local unit of Spain's Telefonica SA (TEF) to bid in an
upcoming auction of dark fiber to be leased by state-run electric
utility Comision Federal de Electricidad.
Televisa said in a press release that the three companies will
form a consortium of equal equity stakes if their joint bid is
successful.
Televisa's CPO shares closed virtually unchanged at 52.14 pesos
($4.14) Friday, while Megacable's shares fell 2.4% to MXN29.10.
The government is tendering 20-year leases for 19,647 kilometers
of dark fiber owned by the utility along three routes: Mexico's
Pacific coast, the center of the country, and the Gulf coast. Dark
fiber is unused fiber on the network.
The government expects to announce the winners of the auction on
June 9 and has set a minimum bid price of MXN859 million for the
three routes.
The auction is expected to help smaller carriers in the Mexican
telecommunications market that lack coverage and infrastructure to
compete against the country's largest fixed-line operator,
Telefonos de Mexico (TMX).
Telmex, as the company is known, has a nationwide network and
controls about 82% of the country's fixed phone lines with about
15.9 million lines in service at the end of last year.
Rivals frequently have to use Telmex's infrastructure to provide
phone service to their clients. The fees they pay to connect to the
Telmex network have been a source of conflict among carriers for
years.
Televisa and Megacable, Mexico's largest cable TV providers,
also offer telephone service and Internet. Telefonica controls the
country's No. 2 mobile operator and has a small but rapidly growing
fixed-line subsidiary in Mexico.
Mexico City-based brokerage Ixe Casa de Bolsa said in a note
that a successful bid by the Televisa consortium might cause
interconnection rates to fall between 15% and 25% as well as reduce
traffic over Telmex's network.
"The impact of the previous suppositions on Telmex's revenue
would be limited because the loss in revenue would be about 1% of
its total sales," Ixe analyst Manuel Jimenez wrote.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5890 5176;
anthony.harrup@dowjones.com
(Ken Parks contributed to this article)