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By Michael O'Boyle and Tomas Sarmiento
MEXICO CITY, March 31 Mexico's Federal Electricity
Commission (CFE) will announce new deals in the coming months to
rent its fiber optic network to budding telecommunication
providers, the utility's head said on Monday.
Director General Alfredo Elias Ayub told the Reuters Latin
American Investment Summit the CFE would likely soon close rental
contracts with cable companies, which began expanding into
telecommunications services last year.
"I think in the next two months there will be more
announcements," Elias said, specifying they would be with some of
Mexico's cable companies.
The CFE, the bigger of Mexico's two state-run electricity
companies, has an enormous network of fiber optic cable that it
began to rent out last year to telecoms companies.
Mexican cable companies have been unrolling so-called triple
play packages, adding telephone and Internet options to existing
pay TV services in a bid to compete with Telmex
TELMEXL.MXTMX.N, which serves more than 90 percent of fixed
line telephone customers in Mexico.
The first of the CFE's fiber optic contracts was signed last
December with Axtel (AXTELCPO.MX), the second-biggest provider of
fixed line services behind the giant Telmex.
Since then, the CFE has signed deals with Alestra, a
partnership between conglomerate Alfa (ALFAA.MX) and AT&T (T.N),
as well as Spain's Telefonica (TEF.MC), Elias said.
While Elias said the fiber optic business would likely "grow
a lot" he said he doubted it would be become a major source of
revenue for the CFE, which sees annual revenues of around $21
billion from its electricity business.
"At the most it will get up to $100 million," he said.
Elias also said the CFE would begin a test run later this
year to explore a new business of providing telephony and
Internet directly to customers through the CFE's electrical
network, a technology known as power line communications (PLC).
"We are carrying out tests," Elias said. "The costs are still
not competitive as the modems are very expensive.
In an attempt to make the technology more cost-effective, the
CFE will begin a trial run in the northern industrial city of
Ciudad Juarez bordering Texas, Elias said.
The CFE will use its electrical network to transmit
customers' electricity consumption data back to the company,
reducing the costs associated with reading meters.
(For summit blog: summitnotebook.reuters.com/)
For more on the Reuters Latin America Investment Summit see
(Reporting by Michael O'Boyle and Tomas Sarmiento)