Shares in tycoon Carlos Slim's phone company Telmex headed for their worst one-day loss in more than a year on Monday after the Mexican government rejected the firm's bid to provide TV services late on Friday.
Shares in Telmex (TELMEXL.MX), Mexico's biggest fixed-line telephone and Internet provider, fell 4.97 percent to 10.33 pesos. The shares were on track to post their biggest one-day percentage loss since February 4, 2010.
The Communications and Transport Ministry ruled on Friday that Telmex had not yet met the regulatory requirements for a TV concession.
Telmex will appeal the ruling, a company spokesman told Reuters.
Slim has been trying to win approval to offer TV services for years. But authorities demand Slim first take further steps to loosen his grip on the telecoms market, such as reducing charges made to rivals to connect calls.
Some analysts said Telmex stock will not be too badly hurt going forward.
"People think they will eventually give him (a TV license)," said Carlos Alonso, head of stock trading at brokerage Interacciones in Mexico City.
Recently, Slim has seen a string of setbacks, including a $1 billion dollar fine against his flagship firm, America Movil, for allegedly abusing its market power in Mexico's mobile phone market. That decision is also under appeal.
Shares in America Movil (AMXL.MX), which controls Telmex, traded flat on Monday.
America Movil recently fell to its lowest price since March 2010 on concerns that regulators will try to further curb the power of Slim's companies.
"It is clear the government is strongly against Slim. The whole monopoly issue could have a negative effect on America Movil," Alonso said.
(Reporting by Michael O'Boyle and Anahi Rama, editing by Leslie Gevirtz)
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