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Category : Business

Mobile phone company owned by Grupo Salinas, the holding company of TV Azteca, controls less than 5% of the market

Mexican regulators have decided to allow national television giant Televisa to buy half of a small mobile phone company owned by its only significant competitor in the TV market, as long as conditions designed to “avoid the risk of collusion” are met.

Televisa currently controls about two-thirds of free TV channels in Mexico, while TV Azteca owns most of the rest. Televisa also has significant interests in cable television companies.

In April 2011 Televisa offered $1.6bn (£1bn) for half of the mobile company Iusacell which is owned by Grupo Salinas, the holding company of TV Azteca, and controls less than 5% of the mobile market.

The planned purchase was greeted with concerns about the two networks using their alliance to fix advertising prices across the media – from TV to smartphones.

The Federal Competition Commission issued a statement on Thursday detailing the conditions for approval of the joint venture.

It said: “The injection of capital into Iusacell could aid more vigorous competition in the mobile market. The accompanying conditions would avoid the risk of collusion and promote greater competition in open and restricted television markets.”

The conditions include the successful auction of a third TV network within two years, and a requirement on the two networks not to “obstruct” the process.

The Mexican mobile sector is currently dominated by the company Telcel which is owned by Carlos Slim, the world’s richest man.

In the past Televisa and TV Azteca have collaborated to protect their dominance of Mexican television. In 2006 both companies ran campaigns discrediting one of the potential investors in a third network project, and thwarted it.

Last week Mexico’s telecom watchdog, Cofetel, published the details of an auction to create two new channels.

The other major condition prohibits the established television networks from imposing discriminatory publicity rates on competitors. The dominance of Televisa and TV Azteca means it is all but impossible to advertise on television without going through them.

The failure to meet these conditions, the commission said, would result in the automatic dissolution of the Iusacell sale, as well as fines of up to 10% of the companies’ annual revenue.

Televisa said it hasn’t decided yet whether to accept the conditions or appeal.

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