UPDATE 3-Mexico’s Televisa eyes Slim’s mobile phone market

* Televisa could get foothold in mobile market

* Talks are latest twist in billionaire power struggle

* Televisa mobile plans with Nextel flopped last year
(Adds analyst comments, background on Azcarraga, Salinas )

By Cyntia Barrera Diaz

MEXICO CITY, April 5 (Reuters) – Top Mexican broadcaster
Televisa said on Tuesday it was in talks with cell phone
operator Grupo Iusacell in a move that could revive its plans
to enter the mobile phone market in Mexico.

The talks are the latest twist in a battle between three of
Mexico’s richest men over control of the communications sector
in Latin America’s second-largest economy.

A deal with Iusacell would put Televisa back on track to
offer mobile phone services in Mexico after a deal with NII
Holdings Inc’s (NIHD.O: Quote, Profile, Research) Nextel Mexico flopped last year and
give it a foothold in the market led by telecommunications
mogul Carlos Slim. [ID:nN09164396] [ID:nN01129898]

Iusacell and Mexico’s No. 2 broadcaster, TV Azteca
(TVAZTCACPO.MX: Quote, Profile, Research), are part of Grupo Salinas. Ricardo Salinas is
one of the country’s wealthiest men with a fortune estimated at
more than $8 billion, according to Forbes.

Televisa, led by media entrepreneur Emilio Azcarraga, and
TV Azteca are embroiled in a dispute with companies controlled
by Slim, who owns telephone network Telmex (TELMEXL.MX: Quote, Profile, Research) and
cell phone network America Movil (AMXL.MX: Quote, Profile, Research)(AMX.N: Quote, Profile, Research).

Slim wants to expand into television in Mexico so his
companies can offer bundled packages of video, telephone and
Internet services, as he does in 16 countries where America
Movil operates.

The Mexican government has so far prohibited the world’s
richest man — already the biggest provider of pay television
services across Latin America — to expand into media because
of concerns about competition.

Televisa has broadcast, cable, satellite, publishing and
gaming businesses — and is the main programmer for U.S.
Spanish-language broadcaster Univision Communications Inc
[UVN.UL] — but lacks cell phone services to round out its
offerings.

“Convergence of services. That is a theme that is driving
consolidation around the world and the same thing is happening
in Mexico,” said analyst Kevin Roe from Roe Equity Research
LLC.

Mexican daily El Universal reported on Monday that Televisa
wanted to buy a large piece of Iusacell’s outstanding debt
currently held by Mexican financier David Martinez.

“At this time, no agreement has been reached between
Televisa (TV.N: Quote, Profile, Research)(TLVACPO.MX: Quote, Profile, Research) and Grupo Iusacell. There can be no
assurances that any agreement will be reached or the timing or
terms of any such agreement, if one is reached,” the
broadcaster said in a brief statement.

Televisa declined to make any further comment. Martinez and
Iusacell could not be reached.

BURYING THE HATCHET

Talks between Televisa and Iusacell suggest Salinas and
Azcarraga may have patched things up after a rocky 2010.
Salinas built his wealth with appliance chain Elektra and Banco
Azteca by giving credit to low-income families. Azcarraga took
over the leadership of Televisa from his father at the age of
29.

Salinas’ Iusacell was seen as a key culprit in the collapse
of the Televisa-Nextel Mexico deal in which the broadcaster had
agreed to buy a 30 percent stake in the NII Holdings unit for
$1.44 billion, subject to the acquisition of spectrum in a
government auction.

Televisa and Nextel did win the controversial auction,
paying a price for the spectrum critics considered extremely
low. Iusacell and affiliated companies filed dozens of lawsuits
in Mexican courts contesting the auction process.

Televisa and Nextel parted ways in October and a source
from the broadcaster said at the time the companies were
discouraged by the legal challenges.

If Televisa does buy a stake in Iusacell, it could bury the
hopes of Nextel Mexico, which has said it would continue talks
on collaboration with the broadcaster.

“If it is a real financial investment, a large peso
investment in Iusacell and becoming a part-owner, that would
preclude any material agreement with Nextel,” Roe said.

Iusacell (CEL.MX: Quote, Profile, Research) was under creditor protection for several
months, but according to a report on Tuesday by daily newspaper
Reforma, a Mexican judge has approved a debt deal between it,
its controlling company and creditors.

Televisa shares slipped 0.10 percent to 59.92 pesos. Its
New York-traded stock slid 0.12 percent to $25.28.
(Reporting by Cyntia Barrera Diaz; editing by Gerald E.
McCormick, Derek Caney and Andre Grenon)

UPDATE 3-Mexico’s Televisa eyes Slim’s mobile phone market