Mexico regulator expects new TV network concessions by year end

Mexico's telecommunications regulator says he expects concessions for two new digital television networks to be granted by the end of this year, increasing competition in the broadcast television market and freeing up wireless spectrum for mobile broadband service.

The plan for digital networks to compete with incumbent broadcasters Grupo Televisa SAB and TV Azteca SAB was drawn up under the previous government administration, and given priority by current President Enrique Pena Nieto, who took office Dec. 1.

"Digital terrestrial television is perhaps the most important of the federal government's projects...because it's one of the few projects that has a positive impact on competition in both television and telecommunications," Mony de Swaan, president of the Federal Telecommunications Commission, or Cofetel, said in an interview.

Mr. De Swaan said bidding rules should be ready in April, and that the concessions could be awarded by the end of the year.

Digital television penetration in Mexico is currently around 21%, compared with 100% TV reception for the existing broadcasters, so the newcomers would be, at least to begin with, operating in a smaller market than Televisa and Azteca, the regulator said.

With Mexico's analogue switch-off planned for the end of 2015, the government is subsidizing decoders that allow analogue TV sets to capture digital signals.

A pilot program in the northern border city of Tijuana, which plans its digital switch-over in April of this year, earmarked 360 million pesos ($28 million) for 200,000 decoders. The government's initial overall estimate for subsidizing decoders was MXN20 billion, but that has come down since the number of digital televisions increased by nearly two thirds in the past year.

High levels of concentration in broadcast television and cable systems create restrictions in both production and distribution of television content, and in the advertising market, Mr. de Swaan said. Greater competition could foster a broader range of programming options, he added.

A telecommunications sector overhaul embracing television, telephony and broadband is among the first planned by the Pena Nieto administration, and a proposal is expected in Congress in the coming weeks.

It would aim to address imbalances in those markets, where America Movil SAB (AMX, AMX.MX)--the telecommunications company

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Source: http://www.totaltele.com/view.aspx?ID=479579

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