Whats Up Slims Sleeve in Mexico?

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Mexico City -- Analysts' reactions were mixed last
week as they mulled news that Carlos Slim -- the force behind Mexico's top telco,
Teléfonos de Mexico S.A. -- is buying an indirect stake in Grupo Televisa S.A.,
Mexico's dominant media company.

Through his Grupo Financiero Inbursa investment company,
Slim recently acquired a 24 percent stake in Televicentro, a holding company that owns 44
percent of Televisa, giving him a 9 percent to 10 percent holding in the media giant.
According to published reports, the stake is worth $350 million.

While some analysts contended the transaction was purely
financial, others speculated the deal could reflect Slim's wider aim of developing
new broadband services on Cablevision, the cable system Telmex and Televisa jointly own.

Inbursa couldn't be reached for comment.

"I find it difficult to believe that what you see
[from Slim on the surface] is what you get," Bear Stearns & Co. Latin America
media analyst Christopher Recouso said.

"We do not believe Inbursa and Carlos Slim are
involving themselves so integrally in Televisa ... for the prospects of potential equity
participation alone. We believe Carlos Slim is interested in building ... a new
media-Internet related entity from his various holdings," Recouso wrote in a recent
report.

The holdings include Internet-service provider Prodigy
Internet de Telmex, plus 49 percent of Cablevision.

The MSO is considered an extremely attractive platform over
which to deliver Internet access and other broadband services because it counts among its
subscribers some of the wealthiest consumers in the country's capital city here.

Slim's motivation for the Televicentro deal could have
been to receive support from Televisa in his designs to acquire some or all of
Televisa's 51 percent stake in the MSO, Recouso suggested.

Slim's attempts to gain outright control of
Cablevision have not been stymied in the past by Televisa, but rather by Mexico's
anti-monopoly commission, according to Mexico City-based Deutsche Morgan Grenfell media
analyst Leonardo Simpser.

He added that the Inbursa-Televicentro transaction was
"purely financial" -- a line that has been echoed by Inbursa executives in the
Mexican press.

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