Grupo Televisa S.A. (TV), the largest media company in the Spanish-speaking world, entered into the lucrative wireless communications market in Mexico . The company has signed an agreement with NII Holdings Inc. (NIHD) to acquire 30% stake of the latter’s wireless arm in Mexico, Nextel de Mexico. Antitrust regulators of Mexico already cleared the application of Televisa to partially acquire Nextel de Mexico’s operations. 

According to the agreement, Televisa will acquire 30% equity stake of Nextel de Mexico for a total consideration of $1.44 billion in cash. Initial investment will be $1.14 billion and the remaining will be made in here equal annual installments. Televisa can acquire additional 7.5% equity interest in Nextel de Mexico either the third or fourth year after the initial investment. 

Televisa hopes to create an innovative converged communication platform by adding Nextel de Mexico’s wireless and broadband services to its existing portfolio of pay TV services that offers market leading content and multiple distribution channels. This new joint venture will offer quadruple play converged services consisting of Wireless, TV, broadband data, and fixed line voice. 

The Mexican government is currently undergoing spectrum auction for two strands of optical fiber to boost competition in the telecom market. The result of this tender process will be declared in June 2010. Televisa and Nextel de Mexico jointly submitted bids for blocks of spectrum in the 1.7GHz and 1.9 GHz bands. Nextel de Mexico is working on building its 3G wireless networks. 

Televisa’s cable TV subsidiary Cablevision will start providing mobile phone services in Mexico from the first half of 2010. Earlier, Televisa negotiated with Vivendi S.A. of France to form a 50-50 joint venture in order to bid for wireless spectrum in the auction. Industry sources reported that that the new company has decided to invest $3 billion to deploy a nationwide wireless network in Mexico.
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