Telmex to fight government's rejection of its video service proposal

Telmex's dream of becoming a triple play (voice, video and data) provider will continued to be a dream deferred as the Mexican government recently rejected its TV service application.

Late last Friday, Mexico's Communications and Transport Ministry announced that Telmex's video service proposal did not satisfy necessary regulatory requirements, including interconnection services to its competitors.

Of course, the battle is not over as Telmex plans to repeal the ruling. Javier Mondragon, Telmex's regulatory and legal affairs director, said that it "has complied with all the requirements" and "this decision by the ministry isn't supported by the law."

"This is bad news," Martin Lara, an analyst at brokerage Actinver, said in a Reuters article, adding that Telmex's shares could take a hit today.

The regulator's latest ruling on video services is just one of several battles Telmex has lost.

By not getting the video license, Telmex is inhibited in its ability to offer a triple play service bundle to battle cable and other telco competitors such as Iusacell that are gaining increased momentum with their respective triple play service packages. At the same time, Telmex is also appealing a $1 billion fine that its parent America Movil overcharged competitors access to their network.  

For more:
- Reuters has this article

Related articles:
Telmex to bring Fiber to the Home to 40 cities in Mexico
Carlos Slim to increase Mexican wireless and wireline network spending in 2011
Iusacell poses challenge to Telmex with new quad-play offering
Cofetel wants Telmex to reduce phone service prices further

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