Mexico's media titans have been slinging mud at one another for
years, but the battle heated up when television companies started
offering digital phone and Internet services, encroaching on Slim's
territory while the terms of his government concession prevent him
from offering TV.
Slim dominates Mexico's phone and Internet markets through America
Movil <AMXL.MX> while Emilio Azcarraga's Televisa <TLVACPO.MX> is
the country's biggest broadcaster. Televisa also offers pay TV and
Internet and phone services.
Televisa's satellite TV business Sky has been facing tough
competition from Dish Mexico, which offers its most basic package at
less than half the price of a similar Sky package.
Televisa and other rivals have complained for years that the
partnership between America Movil's home-phone unit Telmex and
satellite television firm Dish Mexico is improper.
This week, local media published a memo that allegedly details a
deal for Telmex to buy a stake in Dish, and both of Mexico's top
broadcasters, Televisa and TV Azteca <AZTECACPO.MX>, jumped on the
news to demand the regulator renew a 2011 investigation.
Reuters could not immediately confirm the authenticity of the
Telmex, which is now a unit of Slim's America Movil, has notified
investors of the option to buy a stake in Dish since 2009, according
to regulatory filings.
"This has all been very transparent. There is no problem with this
partnership," said Slim's spokesman, Arturo Elias.
Telmex and Dish have had a deal to print a single bill for shared
services, but Televisa alleges the document published by several
media this week suggest a more comprehensive deal.
"The scope of the operation was a lie," Televisa spokesman Javier
Tejado said on Friday, referring to the documents that called the
option agreement "Project Alpha".
"The first thing I ask, if this is all as transparent as Telmex
says, why do they hide behind a secret name like 'Project Alpha?'"
Dish Mexico, a company backed by Mexico-based MVS Comunicaciones and
Colorado-based EchoStar Corp <SATS.O>, has drawn millions of
In 2011, Reuters reported that Mexico's competition watchdog had
opened a probe to determine whether the tie-up between Telmex and
Dish was an illegal, backdoor entry to the television market.
The probe has been handed over to the Federal Institute for
Telecommunications (IFT), a new regulator established by last year's
constitutional reform aimed at increasing competition in Mexico's
television and phone markets.
Lawyers said that if Slim has not exercised his option for Dish, he
is not flouting the terms of his concession agreement.
"Still, all the legal ingredients are there for this deal to be put
into effect," said Jose Luis Benavides, a telecom expert and lawyer.
"And the deal, which isn't finished, has all the ingredients for
distorting the telecommunications and broadcast market in this
[to top of second column]
America Movil says Telmex offers billing services to many companies,
but Grupo Salinas, the parent company behind broadcaster TV Azteca
and pay-television, phone and internet service Totalplay, disputes
"We have requested billing and collecting services from Telmex since
May of last year for Totalplay and certainly feel discriminated
against," said Eduardo Ruiz Vega, director of regulatory compliance
for telecommunications. "Along with the distributed memo that ...
surely begs further regulatory scrutiny."
The IFT is expected in March to declare Telmex, America Movil and
Televisa dominant players in their markets, subjecting them to
tougher regulations and specific obligations.
Televisa and TV Azteca have been waging a separate legal battle
against Dish Mexico for transmitting their free-to-air channels on
its satellite system.
New rules known as 'must offer, must carry' oblige pay television
services to offer free-to-air channels. But the broadcasters have
said that since the government has not yet agreed on the details
behind these rules, they should not yet be forced to hand over their
content for free.
This is just the latest round in an acrimonious and often litigious
battle between the businessmen and their companies.
Although Slim used to be a large shareholder in Televisa and close
with Azcarraga's father, in recent years they have fallen out over
issues including TV advertising and wholesale phone charges.
Several years ago, Slim pulled millions of dollars of advertising
from Televisa after Azcarraga's company raised rates 20 percent.
The companies in 2011 took out front-page newspaper ads criticizing
each other, and a group called "All the Mexicans" disparaged Slim's
core phone business in a newspaper advert called "The Slimsons,"
drawn in the style of the U.S. cartoon sitcom "The Simpsons."
(With reporting by Ana Isabel Martinez and Simon
Gardner; editing by Jonathan Oatis)
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