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Mexican media company TV Azteca SAB (AZTECA.MX) said Monday it won a bid to build and operate a fiber-optic network in Colombia that will enable it to offer telecommunications services there.
TV Azteca didn't disclose how much it plans to invest in Colombia, although the company said in a statement to the Mexican Stock Exchange that the Colombian government will inject about $230 million toward building the network.
The network will cover close to 80% of Colombia--753 municipalities and 40 million residents, the company said.
TV Azteca is controlled by Mexican billionaire Ricardo Salinas, who also owns Mexican wireless operator Grupo Iusacell, which has around 4 million subscribers.
"The Colombian government applies with great certainty a subsidy in order to assure that the most important services for access to the super-highway of information are within reach of all, especially those most in need, at accessible prices via the efficient operations of a competitive company," Salinas said in the statement.
Salinas will face off in Colombia with two companies he already competes with in Mexico, wireless giants America Movil SAB (AMX) and Movistar, a unit of Spain's Telefonica SA (TEF, TEF.MC). In the case of America Movil, Latin America's largest wireless operator and part of Mexican billionaire Carlos Slim's vast empire, Colombia is the carrier's third-largest wireless market after Mexico and Brazil.
TV Azteca hopes the incursion into Colombia will help it diversify its revenue stream, thus spurring growth and complementing its TV content development and transmission services.
Salinas agreed earlier this year to sell a 50% stake in Iusacell to Mexican media firm Grupo Televisa SA de CV (TV, TLEVISA.MX) for $1.6 billion.
--By Amy Guthrie, Dow Jones Newswires; firstname.lastname@example.org