[wsj] A consortium including Mexico's Grupo Televisa SAB (TV, TLEVISA.MX) and Spain's Telefonica SA (TEF, TEF.MC) has won a concession to lease fiber-optic capacity from the country's state-run electric utility as the government seeks more competition in the telecommunications industry.
The consortium was the sole bidder in the auction of a pair of fiber-optic strands, winning the 20-year lease with the minimum required bid of 883.8 million pesos ($69.3 million), Communications and Transport Minister Juan Molinar said at a press conference Thursday.
The results of the auction were hardly a surprise given that the consortium--comprised in equal parts of media group Televisa, cable TV and telecom provider Megacable Holdings SAB (MEGA.MX), and the local wireless unit of Telefonica--was the only bidder vetted by the authorities to participate.
The government auctioned the dark fiber in hopes of increasing competition in the telecommunications sector, which is dominated by incumbent fixed-line phone company Telefonos de Mexico SAB (TMX, TELMEX.MX) and mobile operator America Movil SAB (AMX, AMX.MX). Both companies are controlled by Mexican billionaire Carlos Slim.
Rivals frequently have to use Telmex's nationwide network to provide phone service to their clients. The fees they pay to connect to the Telmex network have been a source of conflict among carriers for years.
By making additional fiber-optic infrastructure available, Molinar said more telecom companies will have access to areas of the country where today there is "only one provider" of telecommunications service.
Under terms of the concession, the consortium will upgrade and operate 19,647 kilometers of unused fiber-optic capacity owned by Comision Federal de Electricidad along three routes: Mexico's Pacific coast, the center of the country, and the Gulf coast.
The consortium has 18 months to get the network up and running, Molinar said.
Televisa, Telco Consortium Win Mexico Fiber-Optic Auction