Televisa and Iusacell merger could yet gain approval

8 Feb 2012

The proposed joint venture between Mexican broadcast giant Televisa and local mobile network operator Iusacell could yet go ahead if the two companies address issues raised by the local competition watchdog. According to the Wall Street Journal, the Mexican antitrust authority, the Comision Federal de Competencia (Cofeco), has confirmed that it rejected the merger proposal on concerns that it could threaten competition in the television advertising market. With the two companies between them controlling almost all of Mexico’s commercial free-to-air broadcast television – Iusacell owner Ricardo Salinas Pliego also controls TV Azteca, the country’s second largest broadcaster – Cofeco is understood to have argued that the tie-up could push up advertising costs, thereby increasing prices of consumer goods that use advertising, adversely affecting consumers.

With Televisa and Iusacell having already announced that they planned to appeal Cofeco’s decision, the watchdog has said that the duo could propose commitments to resolve the associated competition issues during the appeal process. Subject to addressing such concerns in an ‘efficacious and sustained’ manner, the antitrust body has said it could approve the tie-up.

The report, meanwhile, reveals that Cofeco does not see any competition issues in the mobile telephony sector arising from the proposed merger, with the two commission members who voted to approve the transaction doing so on grounds that it could, in fact, enhance competition in that sector.

Mexico, Iusacell (inc. Unefon)