Mexico's federal telecommunications regulator, Cofetel, said Thursday that it's drafting new rules that will make it easier for mobile virtual network operators to do business, with a view to boosting competition in the wireless industry.

Speaking on the sidelines of a conference, Cofetel Commissioner Jose Luis Peralta said the rules, which seek to streamline the authorization process and address issues such as number portability and customer service, would probably take effect next year.

A mobile virtual network operator, or MVNO, typically rents unused capacity from mobile network operators like AT&T Inc. (T) and Spain's Telefonica SA (TEF) and resells it to consumers in the form of airtime and data services under its own brand.

MVNO rules are one of several measures the Mexican authorities are looking at, including the auction of wireless spectrum early next year, to bring more competition to an industry that is largely in the hands of two players.

Telcel, a unit of Latin America's largest mobile-phone company, America Movil SAB (AMX), had a 72% market share, with 58.1 million subscribers at the end of June, while Telefonica's local unit Movistar was a distant second, with about 15.9 million clients, equivalent to 20% of the market.

The rest of the market is divided between Grupo Iusacell SA (CEL.MX) and Nextel Mexico, a unit of wireless carrier NII Holdings Inc. (NIHD).

Mexico's wireless penetration rate was about 72% as of June 30, according to Cofetel.

Jesus Martin Tello, a partner at IT consultancy Everis, said at the conference that international experience has shown a network operator benefits the most from an MVNO partnership when the MVNO takes clients from a rival carrier and allows the network operator to access segments of the population that it can't easily reach.

The high growth rate of Mexico's wireless industry is an opportunity for MVNOs, said Tello, who added that taking and retaining market share through a business model that is untried in Mexico poses a challenge.

Although MVNOs are provided for under Mexico's existing telecommunications rules, so far no investors have stepped forward to test the model.

Morgan Stanley analyst Vera Rossi said in a report Tuesday that media group Grupo Televisa SA (TV) is considering an MVNO to complement its cable TV operations, which currently offer bundled packages of phone, broadband and pay-TV services.

The MVNO industry in the neighboring U.S. is undergoing consolidation, with Sprint Nextel Corp. (S) in the process of acquiring Virgin Mobile USA Inc. (VM), an MVNO focused on the prepaid market.

America Movil unit Tracfone Wireless Inc. has emerged as one of the largest and most successful MVNOs in the U.S., boasting nearly 12.5 million subscribers at the end of the second quarter.

The conference panelists, who included executives from America Movil, Telefonica and fixed-line carrier Maxcom Telecomunicaciones SAB (MXT), said it was unclear if MVNOs would take root in Mexico in the short term.

"An MVNO in Mexico needs to be one of two things. A leader that offers a range of services... or have a niche market focused on a community like a university, a specific group of people or [geographic] regions," said Jorge Halvas, director of legal and regulatory affairs at Maxcom.

-By Ken Parks, Dow Jones Newswires, 52-55-5001-5723, ken.parks@dowjones.com