Friday November 6, 02:50 AM

INTERVIEW - Mexico's Megacable ready to tap mobile phones

By Cyntia Barrera Diaz and Tomas Sarmiento

MEXICO CITY (Reuters) - Mexican cable television operator Megacable has lined up a partner to launch mobile phone services by the first quarter of 2010, its chief executive said on Thursday, as it taps a market led by tycoon Carlos Slim's America Movil.

Based in the western city of Guadalajara, Megacable will use a mobile virtual network operator (MVNO) model to offer cellphone services in Mexico, expanding outside its core pay television business, Enrique Yamuni told Reuters in a phone interview.

Virtual networks, created by striking a deal to use the spectrum and infrastructure of an established cellphone operator, are seen as a relatively low-cost way to enter a mobile telephone market.

Yamuni declined to name Megacable's partner.

He also said that a recently approved new tax of 3 percent on telecommunications services should not have a "catastrophic" impact on the industry but thinks that it hurts penetration of services and hits consumer with higher prices.

"We will extend the tax to consumers," he said, explaining telecom companies were already hit by the depreciation of the peso that sharply increased dollar-denominated costs during 2009.

Mexican lawmakers finalized last weekend a watered-down version of President Felipe Calderon's fiscal reform package to boost tax revenues, cut Mexico's dependence on oil and try to prevent a downgrade from international rating agencies.

Deputies and the Senate approved the telecommunications tax, which excludes Internet services and rural and public telephony. Congress also passed an increase in the value-added tax rate, or VAT, to 16 percent from 15 percent and raised the top income tax rate to 30 percent from 28 percent.

(Reporting by Cyntia Barrera Diaz and Tomas Sarmiento, editing by Matthew Lewis)