Telefonica-backed group to take on Carlos Slim
A consortium including a unit of Spain's Telefonica has secured the opportunity to compete in Mexico's fiber market against telecom mogul Carlos Slim.
The group, which also includes Megacable Holdings and Televisa, bid 883.8 million pesos (€57.5 million) for a 20-year lease to rent a pair of fiber strands held by the company's state-run electric utility, WSJ said.
It was the only bidder in an auction to rent nearly 20,000km of cable owned by Comision Federal de Electricidad, and the group now has 18 months to develop a network using the fiber infrastructure.
The consortium had earlier pledged to spend around 1.3 billion pesos on the network if they were offered the tender, and said they hope to launch the first services by the second half of 2011.
Each company involved in the consortium is an equal participant.
The auction forms part of an initiative by the Mexican government to stimulate wider competition in the nation's telecom sector, which is dominated by billionaire tycoon Carlos Slim's empire.
Slim controls both fixed-line incumbent Telmex, which serves around 82% of Mexico's fixed phone lines, and wireless incumbent Telcel, an America Movil unit which has captured over 70% of the country's roughly 85 million wireless subscribers.