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Mexican Senate approves telecoms-reform bill

Legislation seeks to challenge near monopoly of TV giant Televisa and phone company of world's richest man Carlos Slim.

Last Modified: 01 May 2013 09:19
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Carlos Slim's fixed-line telephone company, Telmex, controls 80 percent of the industry [EPA]

Mexico's Senate has approved legislation to open up the telecommunications industry, a sector dominated by TV giant Televisa and the telephone company belonging to Carlos Slim, the world's richest man.

The bill, approved on Tuesday, is one of the key reforms being pushed by President Enrique Pena Nieto, who took office in December pledging to improve the country's competitiveness.

A majority of the country's state legislatures will also have to approve the bill before it is signed by Pena Nieto.

"What we are doing is opening [the market] to competition," Jorge Luis Preciado, a member of the Senate's radio, film and television committee, told a radio station. "Now it's everybody against everybody."

Telmex, Slim's fixed-line telephone company, controls 80 percent of the industry while his mobile phone service, Telcel, holds 70 percent of the mobile market.

The legislation also aims to break the dominance of the country's two powerful television broadcasters, Televisa and TV Azteca.

Televisa holds 70 percent of broadcast television and 60 percent of the cable market.

Grand alliance

The legislation passed with 108 votes in favour and three against, with the backing of the leaders of the main opposition parties, the conservative National Action Party and the Democratic Revolution Party.

Pena Nieto's Institutional Revolutionary Party (PRI) entered a grand alliance with its two opposition rivals, dubbed Pact for Mexico, to push the president's reform agenda, which has already overhauled labour laws and the education system.

The telecom reform passed despite tensions within the pact over allegations that the PRI was using social programmes in a bid to win regional elections in July.

The legislation aims to increase foreign investment, allowing non-Mexican companies to own 100 percent of the capital of a telephone firm - compared to 49 percent today - and almost half of radio and television broadcasters - compared to zero today.

Two new autonomous regulators will also be created under the reform. A telecoms regulator, Ifetel, will have the power to approve or revoke concessions, while a federal competition commission will fight monopolies.

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