MEXICO - Arabstoday
Mexican billionaire Carlos Slim may have to wait for years to enter his domestic television market now that the government has rejected his bid so close to next year's presidential election. Slim must go back to the drawing board after the Communications and Transport Ministry said his fixed line phone giant Telmex, which dominates the market, had not yet met the regulatory requirements for a TV concession. The rejection was the latest in a string of setbacks for the world's richest man, whose efforts to get into Mexico's TV market have been strongly opposed by the dominant broadcasters Televisa and TV Azteca. "With the 2012 vote just 13 months away and polls showing his conservative National Action Party is way behind the main opposition, President Felipe Calderon is more likely to want to keep the TV bosses on his side than help Slim get richer," said Lorenzo Meyer, a political scientist at the College of Mexico. Richest man on earth "For now the richest man on Earth can't impose his will on the government," he said. "I think Slim will have to wait until Calderon's government ends and negotiate with the next one." Slim is already the top pay TV provider in Latin America, with customers in all countries except Mexico and Argentina. But if he cannot overturn the decision, investors may scale back expectations for his businesses, which have flourished on the platform he built with Telmex two decades ago. The company, which controls about 70 per cent of Mexico's fixed telephone network, pledged to fight the decision. "This isn't the last word," said Telmex spokesman Renato Flores, insisting that a TV concession was still possible under Calderon, who cannot seek a second term in the July 2012 vote. The new president traditionally takes office in December. No official candidates have been selected yet. Regulators and lawmakers from all the major parties have vowed to go after Mexico's oligopolistic business elite. None of the magnates stand out more than Slim, whose firms are worth some $74 billion, according to Forbes. International institutions like the OECD have long urged Mexico to break the stranglehold a select few have on key sectors of the economy. Until recently they were able to blunt antitrust efforts with time-sapping legal injunctions. Now, greater political consensus for reform and rising public activism have sown the seeds of change, piling more pressure on the biggest names, in particular Slim. "The legal battle between the government and Telmex is not finished," said former telecoms regulator Irene Levy, who now runs think tank Observatel. "But in the political battle, during an election season, Televisa is stronger than ever." Costly rejection Investors had been counting on Slim's Mexican television business to create lucrative new revenue streams and promote loyalty among existing Telmex customers. HSBC estimated in a recent research note that Telmex's entry into television would create $5 in added value per share, as well as "stronger pricing power" for other Telmex services. Telmex receipts from pay TV would drive revenue around 6 per cent higher next year as 270,000 new television subscribers joined the company's network, HSBC wrote in its report. The rebuff will disappoint investors who had driven Telmex stock up nearly 9 per cent since January in part because they counted on a favourable television ruling in the near-term.