M&A

17 November, 2009

Megacable may team with rivals in fiber optic bid

MEXICO CITY, Nov 17 (Reuters) - Mexican cable television company Megacable said on Tuesday it may team with other phone and media companies to jointly bid for a strand of government optical fiber expected to be auctioned soon.

Chief Executive Enrique Yamuni told analysts during a conference call sponsored by JPMorgan that his company is talking to Spain's Telefonica (TEF.MC) and partner Televisa (TV.N) (TLVACPO.MX) to create a consortium and tender for the added capacity.

The Mexican government is expected to publish rules to buy the right to use two strands of optical fiber from the Federal Electricity Commission (CFE) at some point this month, on hopes to grant the contracts in January.

Telecoms Alestra, a unit of conglomerate Alfa (ALFAA.MX), and Axtel (AXTELCPO.MX) are also in discussions with Megacable, Yamuni said.

"We are waiting for other companies to jump in the deal with us," he said. "We think the best way of doing it is through a consortium. That would allow us to share the bandwidth."

The CFE's backbone will provide private companies with a new route to transport television, phone and Internet signals to a wider audience.

The government is also preparing rules to tender new mobile telephone frequencies. (Reporting by Cyntia Barrera Diaz; Editing by Gerald E. McCormick)

Source: http://www.reuters.com