July 19, 2017 / 4:04 PM / a year ago

UPDATE 2-America Movil sees approval of partial Telmex separation by year-end

(Adds more comments from America Movil Chief Executive)

By Julia Love

MEXICO CITY, July 19 (Reuters) - Mexican billionaire Carlos Slim’s America Movil expects regulatory approval to separate part of its Telmex unit by the end of 2017 or early next year, its chief executive said on Wednesday.

Mexico’s Federal Telecommunications Institute (IFT) said in March that America Movil, controlled by the Slim family, must separate part of its network infrastructure into a new entity.

The move ratcheted up antitrust measures against America Movil, which has long been dominant in Mexico and is Latin America’s largest telecommunications company by number of subscribers.

Talks between America Movil and regulators on the details of the separation are ongoing, Chief Executive Daniel Hajj said on a conference call after company’s second-quarter results, but he said a deal could be hashed out as soon as the fourth quarter of 2017 or during the first three months next year.

Hajj said the discussions have not touched on whether America Movil will be granted a license to offer pay television in Mexico, something the company has long sought. America Movil has also become Latin America’s biggest pay TV provider.

“Mexico is the only place where there is a limitation,” Hajj said. “It doesn’t make any sense.”

The restriction creates an imbalance between America Movil and competitors such as Mexican media company Grupo Televisa , which can sell bundles of landline, Internet and TV service to consumers, analysts said.

“What they are arguing is that because they already opened up their network for competitors, then the market should open up for them,” said Carlos de Legarreta, an analyst at GBM.

In addition, the Supreme Court is considering whether to wipe away parts of a 2013 reform of the telecom sector that tilted the playing field against America Movil. A ruling could come as soon as August.

America Movil’s lawyers maintain that legislators did not have the right to create “asymmetrical” rules meant to help smaller players.

Nevertheless, America Movil’s recent performance suggests the company has adjusted to the new regulatory landscape, analysts said. On Tuesday, America Movil reported that its net profit climbed 86 percent to 14.3 billion pesos in its second quarter, buoyed by the peso’s recent rally.

“The results in general are positive,” said Intercam analyst Alik Garcia. “I see a tendency toward greater stability in the Mexican results of America Movil.”

$1 = 18.143 Mexican pesos on June 30 Reporting by Julia Love; Editing by Matthew Lewis and Diane Craft

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