Mexican Senate approves telecom reform

Mexico's Senate on Tuesday approved legislation to open up the telecommunications industry, a sector dominated by TV giant Televisa and billionaire Carlos Slim's phone empire.

The bill, already approved by the lower house, is one of the signature reforms being pushed by President Enrique Pena Nieto, who took office in December with a vow to improve the country's competitiveness.

"What we are doing is opening (the market) to competition," Jorge Luis Preciado, a member of the Senate's radio, film and television committee, told a radio station. "Now it's everybody against everybody."

Slim's fixed-line phone company, Telmex, controls 80 percent of the industry while his cellphone service, Telcel, holds 70 percent of the mobile market.

The legislation also aims to break the dominance of the country's two powerful television broadcasters, Televisa and TV Azteca. Televisa holds 70 percent of broadcast television and 60 percent of the cable market.

The legislation passed with 108 votes in favor and three against, with the backing of the leaders of the main opposition parties, the conservative National Action Party (PAN) and the Democratic Revolution Party (PRD).

Pena Nieto's Institutional Revolutionary Party (PRI) entered a grand alliance with its two opposition rivals, dubbed Pact for Mexico, to push the president's reform agenda, which has already overhauled labor laws and the education system.

The telecom reform passed despite tensions within the pact over allegations that the PRI was using social programs to win regional elections in July.

The legislation aims to increase foreign investment, allowing non-Mexican companies to own 100 percent of the capital of a phone firm -- compared to 49 percent today -- and almost half of radio and television broadcasters -- compared to zero today.

Two new autonomous regulators will also be created under the reform. A telecoms regulator, Ifetel, will have the power to approve or revoke concessions while a federal competition commission will fight monopolies.

The bill must now be approved by a majority of the country's state legislatures and then signed by Pena Nieto.