MEXICO CITY -(Dow Jones)- Shares of U.S.-based phone company NII Holdings Inc. (NIHD) fell sharply Thursday following reports that Mexico's leading media company Grupo Televisa (TV, TLEVISA.MX) has decided to back out of a deal to take a 30% stake in its Mexican unit Nextel Mexico to build a third-generation network using spectrum won in a recent government auction. NII shares were recently off 11% at $38.19. Televisa shares trading on the Mexican stock exchange were up 0.7% to 55.47 pesos, or $4.47. A Mexico City business columnist said in the El Universal newspaper Thursday that Televisa has made the decision not to go ahead with the $1.44 billion investment, which would have partnered it with Nextel to develop the network. A spokeswoman for Nextel Mexico said that negotiations with Televisa on the closing of the deal are still continuing. Nextel and Televisa were recently awarded a nationwide 30-megahertz block of wireless spectrum won in a July auction. The award was delayed by a barrage of legal challenges by wireless operator Grupo Iusacell against the terms of the auction. A lawyer for Iusacell, which is among companies controlled by businessman Ricardo Salinas Pliego, said the company will continue to contest the spectrum award through the courts. Televisa couldn't immediately be reached for comment. Nextel Mexico said Monday that 71 legal challenges by Iusacell against the spectrum award have been defeated, and that it expects the most recent lawsuit also to be unsuccessful. -By Anthony Harrup, Dow Jones Newswires; (5255) 5980-5176, anthony.harrup@dowjones.com
